Greek airports recorded an 11.4% year-over-year passenger traffic increase in the first half of 2024. Athens International Airport did even better, up by 16% in the same period, fueled by a rapid rise in international traffic.

This continuous growth trend after a speedy initial Covid-19 recovery, shows the strength of the market and will likely spark the interest of bidders for the upcoming tender for 22 regional airports this year. Diving into the market we can identify the opportunities for potential contenders who may be looking at this portfolio.

Overall, in Greece, international traffic has grown by 13% between 2019 and 2023, and domestic traffic by 12% (see chart below). Growth is seen across the board at the main airports as well as the smaller island gateways. However, the increases are highest for international traffic across Fraport’s regional portfolio. Between 2019 and 2023, the German group ensured almost 25% more international passengers to its 13 island airports.

Fraport has successfully managed to develop its international network and add many direct routes whereas, previously, a connection through Athens might have been required.

British traffic in particular has grown by 25% over this period, making the U.K. the largest source of tourists. Italy (+25%) and Poland (+30%) have also seen large rises. This has more than balanced out the 700,000 or so Russians that have been lost due to EU sanctions in the wake of Russia’s invasion of Ukraine.

Fraport’s Regional Template

The success of Fraport signals an opportunity for other smaller airports where international traffic is not a big component: just 20% of their traffic is international versus 80% domestic. Domestic traffic has grown by 25% from 2019, indicating strong internal tourism demand, albeit via Athens.

With only about 400,000 international passengers traveling to the 22 regional airports to be tendered—mainly charters to the gateways of Karpathos and Araksos—a few new direct international routes from any of the countries mentioned above, or others, could significantly boost traffic and change the business.

The total number of passengers passing through these regional airports in 2023 was about 2.1 million passengers. This is significantly lower than the portfolio currently managed by Fraport, but the islands present strong opportunities for long-term growth.

More Regional Tourism is a Stated Goal

This is also in line with Greece’s tourism development strategy which is aimed at continuing the strong growth seen in the last decade, but focusing more on sustainability and preventing over-tourism. One way this will be achieved is by a better distribution of visitors by spreading them out to currently lesser-known spots around the country.

The development of the 22 regional airports via the upcoming tender is therefore fundamental to this strategy and the continued tourism growth of the country.

In this group, the airport with the largest amount of traffic is Paros with 322,000 passengers in 2023, followed by Karpathos, Alexandropoulos, and Chios—all processing just under 300,000 passengers. The traffic consists mainly of connections to Athens by flag carrier Aegean (former Olympic). The international traffic comprises mostly holiday charters from Germany, The Netherlands, and Israel.

With recent high air travel demand and resulting capacity constraints at many well-known tourism destinations, the smaller Greek islands are well positioned to take on the over-spill.

Benefiting from Greece’s popularity, the tourism strategy, national marketing efforts, and local tourism development, the airports can attract additional charters from airlines such as TUI, Corendon, and Jet2, as well as seasonal scheduled flights by the main European low-cost airlines.

Key source markets would be the U.K., Italy, The Netherlands, and Germany, as well as eastern European countries served by Wizz Air. With a currently low base of traffic, travelers from these markets could potentially propel the portfolio’s annual growth rates into double digits.