european journal of social sciences issn: 1450-2267 - EuroJournals

European Journal of Social Sciences – Volume 5, Number 3 (2007)
on the Frankfurt stock exchange and has become a member of Germany’s M-DAX mid-cap index of
blue chip companies. After Deutsche Lufthansa, Fraport ranks as the second largest aviation-related
company in Germany. The Financial Times also covers Fraport in its survey of European Top 500
companies.
Fraport's expertise is based on almost 80 years of aviation history at Frankfurt am Main,
Germany. Founded in 1924, Südwestdeutsche Luftverkehrs AG – Fraport’s forerunner – began
operating Frankfurt Airport at the former Rebstock airfield. In 1936, Frankfurt Airport (airport code =
FRA) was inaugurated at its present-day location, adjacent to the Frankfurter Kreuz autobahn
intersection about 12 kilometers from downtown Frankfurt. A renowned pioneer for decades, FRA
serves as Fraport’s home base and showcase for the company's know-how and technologies.
Besides managing Frankfurt Airport, Fraport AG and its affiliated businesses provide a wide
range of planning, design, operational, commercial and management services around the world.
Furthermore, Fraport AG also serves as a neutral partner to the world's major airlines: offering a
complete package of aircraft, cargo, passenger and other ground handling services, as well as aviation
security services at FRA and elsewhere. The company is also expanding its activities in airport
retailing, airport advertising, IT services, e-commerce, intermodal concepts, hub management, and
other areas. ICTS Europe, a wholly owned Fraport subsidiary, is now the largest provider of aviation
security services throughout Europe.
To strengthen FRA’s competitive position in international aviation and to meet future traffic
needs, Fraport AG is spearheading the largest development in the airport’s history. The €3.3 billion
Airport Expansion Program (AEP) includes the construction of a fourth runway for landings and a
third passenger terminal with a design capacity of more than 25 million passengers per year. The new
runway will allow FRA’s so-called coordinated runway capacity to grow from 80 to 120 aircraft
movements per hour – a 50-percent increase. In addition to the AEP, Fraport’s is moving ahead with
plans for a new maintenance base at FRA for Lufthansa’s future fleet of Airbus A380 superjumbos that
will be delivered beginning in 2007 (www.fraport.com).
Fraport AG has an extensive risk management system. They are timely determined, evaluate
and control the risks with which their activities are related. The primary objective of their risk
management system is to ensure a controlled treatment of risk. This gives room to maneuver, enabling
risks to be taken if the weighting of opportunities and risks entered into appears to be favorable to the
Fraport A.g. As part of their value-oriented management approach, they make their capital expenditure
decisions based on this principle. In the Fraport A.G., risk management is integrated in the operating
business processes. Management of risks is made by those responsible for the business segments. Risks
from group companies are controlled by Fraport AG, partly via the business segments and investment
controlling department and partly by representatives of Fraport AG on the relevant supervisory boards.
The central body responsible for the risk management system is the risk management committee, made
up of representatives from the group's segments. The risk management committee, which reports
directly to the executive board of Fraport AG, is responsible for monitoring risks and coordinating
measures from the group's point of view. Risk transfer by entering into insurance policies is controlled
by their subsidiary, Airport Assekuranz Vermittlungs-GmbH (AAV). Group-wide guidelines require a
quarterly documentation and reporting of risk situations. This regular reporting format can be
supplemented, on a case-by-case basis, by reporting significant changes. Materiality limits are set for
this purpose. The executive board is thus in a position to meet its responsibility for the entire group.
The ability of their risk management system to function is checked by their internal auditor department.
Their findings serve to continually improve the risk management system. All risks are defined as
significant, to the extent they are quantifiable, if their effect on earnings is at least € 10 million before
tax, as well as risks which are not quantifiable but could have a similar effect on the net assets,
financial position and results of operations. An overall evaluation of the risks to which Fraport AG is
exposed revealed that continuation of the company as a going concern is not endangered as far as its
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