Lufthansa (LH, Frankfurt International) and Fraport AG, the firm responsible for managing Frankfurt International Airport, have reached a provisional compromise on the carrier's continued growth at the airfield.

The two sides have been at loggerheads since the airport operator granted Ryanair, Wizz Air, and other budget carriers special conditions, believed to include beneficial financial terms, under which they would develop the central German airfield into a base. Lufthansa subsequently warned that unless it too was granted better terms and conditions at better rates, it may divert capacity away from its Frankfurt hub, focusing instead on Munich, Vienna, or even Zurich.

To put Lufthansa's dominant position at Frankfurt into perspective, according to the ch-aviation capacity module, for the week starting July 10, Lufthansa controls 63.55% of Frankfurt's total weekly seating capacity of 871,274 seats/week. The next most prominent carrier - Condor (DE, Frankfurt International) - controls just 5.01% or 43,662 seats/week.

As it stands, following lengthy negotiations, Fraport AG announced on Wednesday, July 5, that it had signed an initial agreement with Lufthansa concerning short-term cost savings at its main Frankfurt hub.

The sides said in a joint statement the move will create both the right conditions for the carrier's further growth at Frankfurt Airport while simultaneously providing a basis for further discussions regarding their medium- and long-term partnership.

“Together, we want to exploit potential areas for cost reduction and growth, and thus open up new sources of revenue, which will ensure and strengthen Frankfurt Airport’s future viability and long-term competitiveness," Dr. Stefan Schulte, Executive Board Chairman of Fraport AG, said.

Lufthansa and Fraport said they are planning to work together to identify more areas where they can increase efficiency while lowering costs. One area, in particular, is the improved utilization of existing infrastructure as well as achieving cost reductions through improved passenger traffic forecasting. They will also improve their coordination insofar as customer relations are concerned.

In order to promote continued growth at Frankfurt Airport in 2018, Fraport said it does not anticipate applying for permission to increase airport charges for the coming year. Thus, the existing charges regulation will continue to be valid.