We're Making Fraport Fit
Maintaining Sustainability is Fraport's Goal Dialogue for Cost Reductions
Frankfurt, Germany (ots) - At a press conference announcing Fraport AG's (FSE:FRA) third quarter 2004 results last November, the company's executive board already explained the need for further cost reductions. Now Fraport is launching "We're Making Fraport Fit," a wide-ranging cost-savings program designed to ensure that the company remains competitive in the future. The year 2004 was a record year for Fraport. With a relaxed and target-oriented approach, Fraport wants to prepare from this position of strength for meeting the growing market pressures early enough and in consensus with employees and the works council - to ensure the company's earning power and provide job security within the Fraport Group in the long-term and even to create new jobs. In the current year alone, the Fraport Group plans to add at least 700 new jobs.
Cost reductions are indispensable for sustaining the company's ability to compete and invest. In view of ever- increasing cost pressures, Fraport's management does not see any alternative.
The newly started program targets changes in working hours, pay rate structures and some company social benefits. The results of comprehensive internal dialogue with the work force and employee representatives will determine specifically where the necessary cost-savings can be made.
At a conference today with senior executive staff, Fraport's executive board chairman Dr. Wilhelm Bender, chief financial officer Dr. Stefan Schulte, and labor relations director and executive board member Herbert Mai made it clear - also vis-a-vis the works council - that there are two key parameters for this process, which are not automatically part of cost-savings programs: "Our goal is to continue avoiding operationally-related job terminations in the future," said Bender, and "we intend to implement the necessary reductions in personnel costs in such a way that every employee will still receive the same absolute pay at the end of the month."
Today's management conference will be followed by some 30 dialog sessions with employees until the beginning of March. These sessions will discuss ways for achieving the inevitable reductions in personnel costs, and gather ideas for further reducing material costs and for increasing profits. Employees will be intensively involved in the process of looking for ways to make cost structures more competitive and sustainable over the long term.
At the kick-off event for the "We're Making Fraport Fit" program, Fraport's executive board emphasized that the airport company faced enormous challenges ahead. Resolute action is required now, if Frankfurt Airport wants to maintain its position as continental Europe's central air transportation hub. "It is almost impossible for us to implement price hikes in the market. Indeed, we even have to accept price cuts for some charges," Bender said. Enormous investments have to be made in the existing passenger terminals and security expenditures are increasing steadily. This negatively impacts the company's earnings performance. At the same time, personnel costs account for about two thirds of Fraport's total costs.