German airport operator Fraport AG Frankfurt Airport Services Worldwide and its Greek partner, Copelouzos Group, have signed a €1.234bn deal to operate, develop and maintain 14 regional Greek airports.

The 40-year concessions agreements were signed with the Hellenic Republic Asset Development Fund (HRADF).

The transaction is expected to close during the autumn of 2016. HRADF selected the Fraport consortium as the preferred bidder in November 2014, while the international tender process for the regional airport concessions was launched in 2013.

"The project underscores the extensive know-how that Fraport will be able to provide at these 14 aviation gateways."

Fraport AG executive board chairman Dr Stefan Schulte said: "The project underscores the extensive know-how that Fraport will be able to provide at these 14 aviation gateways, which are vital for Greece’s economy and, in particular, its huge international tourism sector.

"We are proud that the Greek government and the Hellenic Republic Asset Development Fund (HRADF) have entrusted Fraport-Copelouzos with the task of strengthening the competitive position of these airports in the decades to come."

An annual fixed concession fee of initially €22.9m will also be paid by the consortium. It will have to invest a total of €330m until 2020 for the development of the airport infrastructure.

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By GlobalData

Maintenance and traffic-driven capacity investments will also be made during the subsequent years of the project.

The Greek Government will retain the primary ownership of the airports throughout the concession term. Fraport will have a majority share in the concession companies, while Copelouzos will hold the remaining stake.

The 14 regional airports catered for about 22m passengers in 2014 and are expected to exceed the 23m mark this year. About 77% of the total traffic at these gateways serve international passengers.

In 2014, Fraport Group generated sales of $2.4bn and profit of about $252m. Over 108.5m passengers used airports around the world last year, in which Fraport has more than a 50% stake.