May 9, 2017 / 2:43 PM / 8 months ago

UPDATE 2-Fraport to expand Frankfurt airport as low-cost carriers grow

* Q1 EBITDA 137 mln euros vs poll avg 153 mln

* Frankfurt passenger numbers up 3.9 pct Jan-Apr

* CFO optimistic about 2017 Frankfurt passenger target (Recasts with CFO comments on low cost growth)

By Victoria Bryan

BERLIN, May 9 (Reuters) - Frankfurt airport operator Fraport will bring forward plans to build a docking pier to cope with the expected rapid growth of low-cost carriers over the next couple of years, it said on Tuesday.

Fraport was initially slow to lure low-cost carriers, but last year it signed up Ryanair followed by Wizz Air this year, to boost passenger numbers at Germany’s largest airport after traffic fell last year for the first time since 2009.

Fraport Chief Financial Officer Matthias Zieschang said Ryanair was planning to base 12 aircraft at Frankfurt from 2018, up from seven this September, potentially boosting the airline’s passenger numbers from the city to around 3 million next year from 1 million this year.

That, plus growth by other low cost carriers, means the airport will likely hit capacity at its two terminals in 2019 and it is therefore planning to start work early on building a simple one-floor pier, Fraport said.

The pier will have shops but no lounges, could be built within two or three years and be used by low cost carriers before a planned full Terminal 3 opens in 2023.

Fraport is also in talks with Lufthansa, which has a market share of around 60 percent at Frankfurt, about extending the 2017 incentive scheme to reward airlines for growing passenger numbers so that main customer Lufthansa can benefit via its own budget Eurowings division.

“It’s our clear intention to extend the programme to 2018 and 2019,” Zieschang said after the airport operator reported first-quarter results.

Zieschang said low cost carriers and Lufthansa’s return to growth meant Fraport was confident it could reach the upper end of its 2-4 percent passenger number growth at Frankfurt this year.

Passenger numbers at Frankfurt were up 3.9 percent in the first four months of the year.

“We expect a very good summer season,” Zieschang added.

The group also reported a greater than expected 5.7 percent drop in core earnings to 137.3 million euros ($150 million), hit by an increase in provisions for a staff restructuring programme, plus 5.9 million euros of startup costs for its unit to run newly acquired Greece airports.

$1 = 0.9153 euros Reporting by Victoria Bryan; Editing by Maria Sheahan and Susan Thomas

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