Ladies and gentlemen, welcome to Fraport's Q3 analyst call, also from my side. The presentation will be started today by our CEO, Stefan Schulte, before our CFO, Matthias Zieschang, is going deeper into the numbers. Let us not hesitate any further, but start.
Yeah, another welcome from my side here from Frankfurt. The last time I presented back in March, the world was still very much in lockdown mode. Fortunately, the vaccine rollout has, in the meantime, been quite successful in many countries. It was just yesterday that the U.S. market reopened for non-essential travel after more than 600 days of being shut. We also see some progress on other intercontinental markets like Singapore or Thailand, which have meanwhile opened up for non-essential travel again. We are quite encouraged about the most recent trends. However, we also see that the sky is not just blue. We are also seeing infection rates going up again and some countries going into lockdown again. The picture remains mixed and the recovery that we're all waiting for and that we want to happen remains quite fragile.
Structural headwinds we are also seeing from increasing burdens on the European aviation sector due to the EU Fit for 55 program. In principle, the program is a vital step forward. Climate neutral aviation sector giving an obligation to all market participants to refuel sustainable fuel and to put the burden with the refineries, so creating a sustainable fuel market by regulation. We just have to make sure that this will be organized competitively neutral. That means flights via Middle East or Turkish hubs have to be treated the same way as flights via European hubs. Here, I'm quite optimistic that we will be successful, finally. Let's focus now on the nine-month figures, which brings me to slide three of today's presentation. Total group revenues, excluding IFRIC 12, recovered by roughly EUR 500 million in the period under review.
The figure also includes other income from COVID-19 compensations and a settlement in the security business in the total amount of more than EUR 330 million. Adjusted for this special item, the increase in total revenues was still solid at a level of EUR 160 million. Key drivers for the revenue increase were our international holdings. Adjusted for IFRIC 12 and compensations, total revenues outside of Frankfurt grew by about EUR 180 million. Here, in particular, Fraport Greece showed a dynamic recovery and reported revenue growth of EUR 80 million on an adjusted basis. With regard to OpEx, you see the effects of our restructuring program. Compared to the previous year, we took out an additional EUR 80 million on a like-for-like basis.
As a result of the higher revenue and lower OpEx, our reported EBITDA increased sharply by more than EUR 850 million to EUR 624 million. The underlying EBITDA, so without the special effects, was up by EUR 240 million to more than EUR 290 million. Here, Frankfurt Airport provided growth of more than EUR 120 million, while it was again our international business that provided for the lion's share to the EBITDA recovery. Adjusted for special items, international activities reported an EBITDA of 196 million euro, and therefore accounted for more than two-thirds of our underlying EBITDA. Remarkable share, which again highlights the strategic value of our investments outside of Frankfurt.
Lower depreciation and amortization and an improved financial result, thanks to Antalya, led to profits after tax of almost EUR 100 million. Turning the page to a review on the third quarter standalone. I'm on slide four. The third quarter was marked by an even steeper recovery. Total revenues without IFRIC 12 increased by more than EUR 300 million to EUR 608 million, or EUR 650 million on an adjusted basis. As a reminder, the first 9 months were only up by EUR 160 million. Here, Q1 2020 was still running more or less at full mode, so before the crisis mode. The revenue recovery in the third quarter was balanced between Frankfurt and our international activities at about EUR 140 million for each of them.
As a result, also the EBITDA share was more balanced at 60% of the underlying results coming from our international activities and 40% from our three Frankfurt segments. Having said this, our international activities recovered during the third quarter by more than three-quarters to the pre-COVID EBITDA. A remarkable recovery. For Frankfurt, it is still a way to go due to the slower traffic recovery and higher share of fixed costs, the EBITDA recovery in Frankfurt was still below 50%. Bottom line, also our profits after taxes were positive in Q3 with or without one-offs. That's very positive. Looking back at the traffic performances in the past nine months, I'm on slide 5. Compared to the previous year, most of our group airports showed a steep traffic recovery during the first nine months. The exemptions here were Ljubljana and Frankfurt Airport.
Those airports show a more balanced year-round operation. Therefore, the first quarter of 2020, so before COVID crisis, was stronger in relative terms and negatively impacted the year-to-date performances. Both airports, however, recovered sharply on the third quarter exclusively. For the third quarter, in general, we see that the group airports clearly recovered. On average, the airports are back at roughly 50% of the pre-COVID level, while certain airports like Greece and Antalya or Saint Petersburg and Brazil recovered even stronger. Those airports are characterized by leisure traffic or have a higher share of domestic traffic. What are the latest trends that we are seeing end of the summer or end of the autumn? On slide 6, you see a focus on our main airport operations.
While Europe remained in lockdown until something like June, the traffic figures for Fraport Greece and Antalya recovered rapidly in just three months from 15%-20% to a level of roughly 80% in September. Frankfurt Airport, which has a higher share of business passengers and serves as an intercontinental hub, recovered slower. On the chart, you also see the preliminary figures for October. Here, we are encouraged by the trend at Frankfurt Airport, where we served more than 50% of 2019 level for the first time again. Also, our Latin American airports in Lima and Brazil, which opened up later than the airports in Europe, continued their recovery and recorded about 60% and 70% of the pre-crisis levels. Greece and Antalya remained very strong and almost achieved the levels of 2019.
You see here for October, 96% and 92% of pre-crisis levels, which is a very, very good signal. An operational topic that you may have read in the press is shown on slide seven. While Frankfurt Airport just recovered around 50%, we had some challenges with punctuality or the other way around with delays. On slide seven, you'll see some further insight. In this recovery phase, airlines focus strongly on peak hour flights. The result is obvious. During attractive slots, we are back at 80% or even 90% of pre-corona traffic. The flip side, however, is that during off-peak hours, we are way below those levels. Moreover, the utilization between the individual days of the week is quite different.
While we used to have an imbalance between weekdays and weekends of maximum 20% before COVID, we are discussing these days an imbalance of 30% and even more between a regular Tuesday and a Saturday today. To make a long story short, with 70% of staff loading and unloading aircraft, it is difficult to handle 90% of aircraft movements in peak. In this area, we hire people again, and the good thing is we have some delays, that's why, but we don't have any cancellations, and we're improving from day to day with the situation, even on the ground and inside, loading, deloading, baggage. Looking ahead, you will find the outlook on our Frankfurt winter season on chart 8. The most important message here is that the winter in Frankfurt does not show a negative trend compared to the summer season.
We see that scheduled movements are at 70% of pre-crisis level, which is slightly better than the past summer season. Recovery in terms of seats is a bit lower when compared to movements at roughly two-thirds. The reason is quite simple. We have more frequencies on the continental side with smaller aircraft and on intercontinental routes, the four-engine aircraft types are gradually being taken out for smaller triple seven A350s or Boeing Dreamliners. The region we see the biggest recovery on continental routes. Here, the movement capacities are already back at 76% and the seats at 70%. On intercontinental routes, the recovery takes longer, as expected, and is on average at 66%. Within the intercontinental markets, we see the biggest momentum at 80% to the Middle East and now 76% to North America.
The slowest recovery we're seeing on Far East routes at less than 50%, especially China, continues to be weak and remains at only 20%, largely closed. An update on the programs to win back to recovery is shown on chart 9. The most prominent topic here we placed first, the staff restructuring program in Frankfurt. As you can see on the chart, we have meanwhile reduced the labor force by some 4,300 employees compared to year-end 2019. While the figure is flat against end of June, the figure already contains some re-hirings because of the before mentioned peak hours throughout the day. Looking ahead, we expect the figure to remain at around 4,000 people despite the re-hirings. All in all, we are on a good track to deliver on our target set for staff cost savings.
On non-staff, Matthias will also provide an update later on. We are also on time and budget to save another minimum EUR 100 million per year. CapEx, we already took out EUR 400 million in the previous year. In our initial plans, we also prepared you for a higher annual CapEx of about EUR 1.3 billion per annum until 2024. Today, you will see us more between EUR 1.1 billion-EUR 1.2 billion per year. I will also provide an update on our major CapEx program shortly. CO2 is another major topic which has made it on our day-to-day agenda. From today's perspective, we are in the final phase to close a power purchase agreement to support a newly planned wind park project. Moreover, we continue with our three pillar strategy, avoid consumption, upgrade technology, and produce green energy.
With all those measures, we are on a good track to provide you a roadmap to net zero soon. Currently, we are still waiting for two major puzzle pieces to complete our roadmap, especially the wind park, as I mentioned. We will provide you an expert session in the upcoming year to discuss these topics in detail. Switching gears and moving on to our CapEx programs. On chart 10, you see the image of the new terminal building in Lima. The expansion itself, we started a year ago with the earthworks for the new runway. The runway itself will put into operation in a year from now, so end of 2022. A month ago, we also signed the EPC contract for a new midfield terminal.
The awarded consortium was Inti Punku, which is made up of Sacyr, probably the right spelling, I don't know, or right pronunciation. Sacyr, a global infrastructure development company, and Cumbra, a main Peruvian construction company. The construction period is set at three years, and we expect the terminal to be inaugurated at the start of 2025. For the runway and the terminal, the investment volume will be around $1.2 billion. One year later than in Peru, we expect Terminal 3 in Frankfurt to open up. On chart 11, you'll find the latest picture of the terminal. As you can see on the picture, the superstructure of the terminal is almost completed. On the right-hand side, you also find some further information regarding the awarding progress.
Out of the total budget of around EUR 4 billion, we have meanwhile awarded contracts in the amount of roughly EUR 2.8 billion or 70% of the order volume. This is in particular important as the current shortage and inflation on raw material is not 100% affecting the construction in Frankfurt. The superstructure works are the most raw material intensive works, and here, large parts are already behind us, and all the steel is on the ground. Moreover, when it comes to newly awarded lots, those tenders are also in line with our budget. We continue to be on track to be ready with Terminal 3 in Frankfurt. The near-term future ahead is shown on chart 12, our updated outlook. First concluding the first nine months, we specified our outlook regarding Frankfurt traffic.
We now expect to achieve the upper range of our initial guidance, so around 25 million passengers. As a consequence of the better traffic performance in Frankfurt, but also the year-to-date performance within our international activities, we raised our revenue outlook on a group-wide level to slightly above EUR 2 billion. Simultaneously, we expect that our group EBITDA will be somewhere in the range of EUR 650 million to slightly above EUR 700 million. Consequently, we also raised the expectations for our group EBIT and group result. On group result, we expect to be positive. Our midterm expectations are shown on chart 13. For Frankfurt, we continue to expect to be traffic-wise recovered by around 2025 or 2026.
Due to our cost-saving measures, we, however, expect to be financially recovered already by 2023 or 2024. With regard to our international holdings, we expect those to be on average, traffic-wise recovered by 2023. This will also mark the year when we expect to be financially recovered in international activities. Having said this, I would like to thank you and now Matthias with more financials.
Thank you, Stefan. Ladies and gentlemen, good afternoon and also a warm welcome from my side. On my first chart today, chart number 15, I'd like to focus on our group cash flow and indebtedness situation. As you can remember from our H1 results presentation, our group cash flow and indebtedness this year have been adversely impacted by severance payments for Frankfurt staff. Here, we meanwhile cashed out just about EUR 220 million for employees to leave the company. This figure negatively impacted our group operating cash flow in the period under review. On the other side, we received one hundred sixty million euro as compensation from the German state and the local state of Hesse to compensate for the operational costs incurred to maintain Frankfurt Airport open during the first lockdown period in the past year.
The cash inflow of EUR 160 million we received during this third quarter this year, as you will also see on my next chart. Concluding the first nine months led to a negative free cash flow of about EUR 630 million. When compared to the six months free cash flow of minus EUR 755 million, this represented a Q3 improvement of EUR 120 million. The negative nine months free cash flow was more or less exclusively attributable to the expansion programs in Frankfurt as well as in Lima, but also due to the final CapEx invoices we paid for Fraport Greece and Fraport Brasil in the first half of the year. As a result of the negative free cash flow, our group indebtedness stood at EUR 6.2 billion at the end of September.
Compared to the figure at the end of June, this was a reduction of EUR 100 million, and we recorded therefore an improvement in our gearing ratio by 7 percentage points from 173 down to 166. On the next chart 16, we provide you with a closer look at our group cash flow statement during the third quarter on a stand-alone basis. Thanks to the EUR 160 million compensation payments, our operating cash flow was positively impacted and reached a level of more than EUR 410 million. When adjusted for the compensation payments, our operating cash flow still reached a solid level of more than EUR 250 million.
It is important to highlight that we just discussed the third quarter performance and that the passenger numbers at Frankfurt Airport continued to be down by more than 50% compared to our pre-COVID levels. The underlying operating cash flow of EUR 254 million was more than sufficient to cover all maintenance needs to run the group. On the right-hand side of the chart, you can see the corresponding calculations. Assuming no expansion programs, we recorded a strongly positive free cash flow of about EUR 175 million, and this expresses the cash power of our company. Even when taking our big CapEx programs into consideration, the underlying Q3 free cash flow was only mildly negative at -EUR 40 million.
Assuming an equal amount to be invested in the third quarter of the upcoming year, it is possible that we will already achieve a positive free cash flow in the third quarter of the upcoming year, despite the heavy CapEx programs that we are currently running. Due to the compensation payments, which we received this year, our reported free cash flow was positive at EUR 120 million in the third quarter, and our group indebtedness improved correspondingly. How did the Q3 extra money flow into our group liquidity situation and available cash reserves? On chart 17, you see our most up-to-date group cash situation. Reviewing the chart, you will see that our group cash reserves remained largely unchanged compared to the figure we provided you at the end of the second quarter.
As a result, we used the positive Q3 free cash flow to pay back parts of our financial liabilities. Here, our gross debt declined slightly from EUR 9.8 billion at the end of the second quarter to about EUR 9.7 billion at the end of the third quarter. Moreover, in the green box on the chart, we highlighted our most recent promissory note loan. The promissory note loan was a big success. When we opened the order books, we just intended to raise some EUR 200 million. At the end of the order period, the amount of firm orders stood well above EUR 500 million. As a result, we were able to price the loan tightly and raised EUR 500 million.
The proceeds we have meanwhile partly used to pay back a scheduled maturity of EUR 400 million in October, which was priced higher at just under 1.5%. The promissory note loan placement provides us with some EUR 100 million extra money without paying any higher interest costs than before. Big success of our finance team might like to thank here. Let me now move on to our segment performances, starting with aviation on chart 18. As with the previous quarters, we provide you for all segments a comparison with 2020, but also with the pre-COVID levels in 2019. The segment revenues in aviation continuing to be positively impacted by the security settlement in the first quarter in the amount of some EUR 58 million.
Adjusted for this item, revenue stood at EUR 365 million and therefore a notch above the previous year's level, despite a 2% drop in passenger volumes always compared to the previous year. The EUR 11 million higher underlying revenue was mainly attributable to a EUR 10 million increase in security services. On the level of the segment EBITDA, we recorded in addition the EUR 160 million governmental compensation that we already discussed before. Adjusted for the security settlement and the governmental compensation, the underlying EBITDA came to -EUR 45 million. When compared to the adjusted value of the previous year, this represented a strong improvement of EUR 74 million at a lower absolute number of passengers. The improvement was mainly attributable to a EUR 63 million reduction in underlying OpEx and the before-mentioned increase in underlying revenues.
In fact, when bearing the low margin of our security business in mind, the underlying OpEx, excluding for security services, was even reduced by more than EUR 70 million. Looking ahead, we also expect the regulator to approve our fee application for the aviation charges in the upcoming year. We currently expect to hear back from the regulator by end of this month. Moving on to our Retail and Real Estate segment on Chart 19. Looking at the individual revenue streams of the segment, we are pleased to see that our real estate subdivision is back on the pre-crisis level. The result is even stronger, bearing in mind that Terminal 2 was closed for 5 out of 9 months this year. In contrast, retail revenues were still clearly impacted by the lower number of passengers.
At EUR 52 million, retail revenues were even down compared to the first nine months of the previous year. The explanation here can be found in the shortfall of advertising revenues. Here, the first quarter of the past year was more or less unimpacted by COVID-19, which led to clearly higher advertising revenues in the nine-month period of 2020. Parking revenues, on the other side, were mildly up compared to the previous year, despite the 2% lower passenger numbers. At EUR 191 million, segment EBITDA reached more than 60% of the 2019 value, mainly thanks to the strong real estate performance. The continued OpEx savings also put us into the situation to record an all-time high EBITDA margin of more than 82% in the period under review.
The financial performance of our ground handling segment is shown on chart 20. As with the other two segments, revenues in the ground handling segment continued to be more resilient than the pure passenger performance in Frankfurt. At EUR 270 million, segment's revenues were up by 8% against the first nine months of the previous year and down by 50% compared to the same period of 2019. Key drivers for the better revenue performance, again, were charges that are not directly linked to passenger numbers, so maximum take-off weight and movement-related charges. The cost side of the segment also continued to improve. At EUR 330 million, total OpEx was down by EUR 18 million when compared to nine months 2020, despite the fact that we recorded higher revenues.
Still, in absolute numbers, we lost about EUR 50 million with regard to the segment's EBITDA in the first nine months. A situation which is clearly not satisfying. The bright spot, however, remains the focus on the third quarter. Here, we clearly see that our efforts to restructure ground handling are bearing fruits. At -55% passengers compared to 2019, the segment almost achieved an EBITDA break-even at -EUR 2 million EBITDA. On chart 21, you see the summary of our Frankfurt results during the past periods. When compared to our operational expenses in the past years, we clearly see the restructuring gains. In total, we achieved cost savings of more than EUR 340 million or about 30% when compared to our pre-COVID cost level.
We continue to be well on track to deliver on our cost savings target of EUR 450 million-EUR 500 million this year. Also, when compared to the first nine months of the past year, the cost savings are remarkable at EUR 80 million. The savings are remarkable because we handled almost the same number of passengers, which we reopened Terminal 2, and we reduced the application of short-time work. The latter two effects, so the reopening of Terminal 2 and the reduced application of short-time work, led to a higher sequential cost in the third quarter. As those two effects account for some EUR 30 million higher cost, our underlying cost performance continues to be strong as we offset about EUR 10 million here.
Regarding the EBITDA, we managed to achieve a positive EBITDA of more than EUR 100 million across our three Frankfurt segments in the third quarter. This also means that on an annual basis, we can cover all Frankfurt interest and maintenance costs in running the airport only at about 50% of the pre-COVID levels. A very good result, which again shows a strong free cash flow potential Frankfurt Airport has. On the next chart, 22, you will find the financial performances of our international activities and services. The very positive message here is that despite the continued strong impact of the pandemic, all investments were EBITDA positive. Jointly, the majority-owned international activities and Frankfurt services contributed some EUR 312 million to our group EBITDA.
As Stefan already mentioned, the segment therefore accounted for the highest share in group EBITDA and stood on a reported basis at exactly 50%. The performance of the international activities is even more impressive on a quarterly basis. During the third quarter, the majority-owned investments and Frankfurt services contributed an EBITDA of EUR 184 million. The segment was therefore accountable for the absolute highest share of the group EBITDA. During the third quarter of 2021, the international segment contributed about two-thirds to the group EBITDA, also an all-time high value. Moving now on to my last chart, our international activity segment on page 23. For the segment, we continue to see that revenues excluding IFRIC 12 are clearly impacted by COVID-19. Compared to 2019, segment's revenues dropped by roughly 46% or more than EUR 360 million.
On the other side, we significantly took out underlying OpEx. Compared to 2019, we saved around EUR 183 million. Having said this, the underlying EBITDA was only down by EUR 174 million, despite the steep drop in revenues of EUR 360 million. Compared to the previous year's adjusted EBITDA of EUR 82 million, we recorded a steep increase in EBITDA to EUR 196 on an underlying basis. Here, ladies and gentlemen, we are very pleased to see the results of our cost savings measures and the higher charges in Greece. While the adjusted EBITDA margin stood at 26% in the previous year, the cost savings and higher charges brought back the EBITDA margin to the 2019 level of 45%.
During the third quarter, the margin was even higher than in 2019 at 61% without considering any one-offs. Having said this, ladies and gentlemen, I'd like to conclude my presentation with this positive message, and we are looking forward to your questions.
Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. If you're using speaker equipment today, please lift the handset before making your selections.
Anyone who has a question may press star followed by one at this time. One moment for the first question, please. The first question is from the line of Elodie Rall from J.P. Morgan. Please go ahead.
Hi, good afternoon, everyone. Thanks for taking my question. I'll have three. First of all, on the revised guidance. You have increased it, obviously, given the good results. But I'm just wondering, why is your revised guidance still very conservative as it looks like? Because, even the top end of your guidance implies Q4 EBITDA of EUR 80-90 million, and your bottom line, your bottom end basically implies no EBITDA at all almost, in Q4. Why are you being so conservative when you only have one quarter to go? Are you expecting something bad in Q4? Maybe some costs going back up with traffic. If you could give us a bit of details on why being so conservative. That's my first question.
Second question would be on tariff update, please, for next year, and what you're thinking for the years after next year. My third question is on CapEx. I'd like to understand what will be the normalized amount of maintenance CapEx post the opening of Terminal 3 and the completion of Lima as well. If we could have a little bit of phasing in terms of CapEx, an update on phasing for CapEx over the next 4-5 years, that would be helpful. Thank you.
Let me start a little bit general on the revised guidance. From this point of view, we are quite positive regarding the fourth quarter traffic-wise, but that's more Frankfurt because the international participations will not contribute the same amount on the fourth quarter because whether it's leisure, whether it's tourists, the season is more or less done. Your point is correct. It depends a little bit, and that's the reason for the wider range. We're still working on some projects, and it depends a little bit whether we have to book some provisions, yes or no. That's a topic on Fraport USA, where we are in some fights regarding progress. It depends regarding one concession, whether we will comply with all deadlines, say yes or no, or whether we have to book some provision.
Second, here on Frankfurt business with the restructuring of, on the security business, there we are still in discussions also with the workers' council and not just with the workers' council, and let's see how this work. That's the reason for the broader range on this guidance, and we hope to be more on the upper end, but it depends on those topics as mentioned. I'm not discussing another time of lockdown. I don't see any lockdown. What could happen, of course, is at the moment we are quite optimistic regarding the traffic. We see that the business traffic is coming again, back. Growth, business passengers are flying again. That's positive. Intercontinental is reopening.
We see also on a daily basis more intense discussion on COVID and so on and so on. At what time this could change the mental situation of passengers continuing to fly or to be more prudent on that side, I don't know at the moment. The main issues are that the end special topics, yes or no. Regarding traffic year update for next year, it's difficult at the moment. I will give a best guess at the moment, somewhere in the range of 60%-70%, but it's too early to be quite honest. Just the momentum from today's point of view, and we will give you more clear insight there with full year's presentations in March or even earlier, January, February. Let's see.
It depends very much on the COVID development and not whether we expect another time of lockdown. I wouldn't expect a lockdown in Germany as long as you are 2G, on a 2G base, so if you are vaccinated, then I would expect that there will be no further restrictions for those who are fully vaccinated. Nobody knows what's going on internationally, whether other countries are restricting air traffic another time, yes or no. What nobody knows is how people react at the end. You see on a daily basis news opening up in the morning at 7:00 A.M. with the new COVID numbers and so on.
That's a little bit the topic behind, but we are quite optimistic for next year, probably starting already Easter and then another time, with a clear summer peak and then further growth in autumn. The CapEx phasing to you, Matthias Zieschang.
CapEx after finalizing the expansion programs, we see and expect a sustainable maintenance CapEx level in Frankfurt of a little bit more than EUR 200 million. Outside Frankfurt in our international portfolio, less than EUR 100 million for all airports. If you put this together, the long-term sustainable CapEx level is up to EUR 300 million per annum, all included.
Okay.
The next question is from the line of Cristian Nedelcu from UBS. Please go ahead.
Hi, thank you very much for taking my questions. Also, three, if I may. Firstly, on transatlantic capacity, I think overall at a market level, December is somewhere around 70% of the 2019 capacity. Could you tell us your expectations as we move into 2022 on transatlantic? How do you see the passenger traffic evolving as a percentage of 2019? Any color there would help. Secondly, could you give us please an update regarding the tender in Antalya for the extension of the concession there? Any more detail you can offer us in terms of the range for the upfront payment or any CapEx involved there? Then I guess your strategy, if your intent is to participate there, that would also help.
The last one, just on thinking about your OpEx in 2022, what do you budget internally in terms of cost inflation next year? Either it's wage inflation or one of your peers is talking about electricity costs going up quite a bit. Any more inputs you could offer us into 2022 OpEx wage inflation and cost inflation? Thank you.
Thanks very much. I can start with your first questions on transatlantic traffic. As mentioned, we see on the intercontinental market the biggest momentum at 80% for the winter season on the Middle East and 76% on North America. Of course, we don't have a crystal ball, but we would hope that we see even higher growth rates and over the year next year if there's no further COVID impact or something like this, so that the U.S. traffic, which is very important for us, would show further growth over the year.
In principle, from today's point of view, but that's not a guidance from today's point of view, we hope to start next year in the first month on a level of 55%-60% of traffic, especially on continental traffic, but also some intercontinental traffic. Then we'll of course hope to see a first peak during Easter and in May with all the holidays and so on, the longer weekends to hope to peak of more than 70%, 80%, whatever in summer. We have to see. It's a little bit too early at the moment, so if I gave you a range of 60%-70%, it could even be depending on summer, depending on COVID, a little bit better. That's it. It's not a crystal ball.
It's too early at the moment to see how everything is developing on that side. We are quite optimistic on 2G base that most of our passengers are at the end fully vaccinated, and they will continue to fly if the situation keeps under control. That's the important thing around the world. Nobody knows at the moment at what time China will open up. There are rumors in the market that Far East, especially China, could be, could continue to be closed up to end of next year. I can't comment on that. I have not, and we don't have the crystal ball. Regarding Antalya, I can just tell you that we have a close look at that one that's here because we are in there already for 20 years. It's an attractive market, that's no question.
There's also, there are some limits, and we will have a close look to this one to how could we continue, how could we bid for Antalya, with limited resources on that, how do we structure that one? Maybe taking a partner in or whatever. It's too early at the moment. We also have first to check all the documents, and the chance and risk profile, whether it's attractive for us, yes or no. But we will let you know. At the moment, due date is beginning of December, and there are still two or three weeks to go on that side. I forgot to answer the first question or the second question from your predecessor, so the amount on aviation charges.
If I got the question correct, it was the question what's going on for next year. We consulted, and it's done already. This was +4.3%, which are already smooth, so we can increase that number. There's no further decision for the year 2023, that's too early. We'll make up our minds in the first quarter of 2022. Matthias on OpEx.
Yeah. Regarding inflation impact on our cost side, normally when we are looking forward in our long-term plan, we have, you can say, an average inflation increase of 2%-3% on the wage side as well as on the price side for products. Now, everybody notices that the prices are going up, but we do not expect a wage price spiral in the future. Of course, it's just a temporary increase of prices and but this will not create a huge negative impact for our business because we have a lot of long-term contracts. We have a, you can say, a contractual protection against inflation over the next couple of years.
Perhaps in average, there could be a higher price level of about 1% compared to what we have and had in our long-term planning. We do not expect. Let me say price surprises on the construction side or on resources side due to these long-term lasting contracts, which we have here for the company.
Thank you very much.
Welcome.
The next question is on the line of Ruxandra Haradau-Doser from Kepler Cheuvreux. Please go ahead.
Good afternoon. Three questions, please. First, a clarification question on next year. Lufthansa indicates 80% of pre-crisis capacities next summer. Given your plans for next year, could such a recovery imply challenges for your ground handling division next summer? Second, could you please give us a breakdown how the cost savings that you are currently implementing will be distributed to the different divisions of the group? And third, do you see any potential to restructure the financing of the Brazilian airports? You have very good financing conditions in Germany, but the interest payment for the small debt position in Brazil looks very high. Thank you very much.
Yeah, thanks a lot. We're at the moment in a phase where it's very difficult to predict exactly the traffic development and for the next 12 or next 24 months. What we have seen already this year, if you remember, we have been in Germany in a lockdown up to June, or more or less seen as a lockdown up to June. Then suddenly June, but especially July or August, we saw the increased number from warm water destinations, as we call them. At that time, beginning of the summer, we haven't believed that still the autumn vacations would be so strong as they now came through. Nobody knew at what time the states are opening up. We have to plan a little bit on scenarios.
One scenario is really that we will be able to handle 80% of the traffic in summer. That's one of the scenarios. I'm not saying we are planning for this, but something like this could occur. That's absolutely right. That's the reason we're trying to set up the business on the ground handling side, loading, deloading, and so on, more flexible than we do it nowadays. So to be more flexible on the shift basis, to have further incentives out to hire people. That could be that at the end, we have a little bit too much people on or a little bit too less, but we have to have enough flexible instruments that we can handle even 80% next summer. Absolutely right. We have to be prepared for that.
On cost savings material, cost savings or the drill down of the allocation of percentages, if you assume 100% of our cost targets for next year, which we already defined, about EUR 250 million on the personnel cost side and EUR 100 million-EUR 150 million on the material expense side. You can allocate this in 40% to aviation, 40% to ground handling, and 20% for retail as well as internal services.
With the question on the Brazilian smaller financing, well, the existing smaller financing, I don't have the numbers on that one.
The interest cost or what is it?
Yeah.
Let me say the financing in Brazil is done on Brazilian real. The Brazilian currency project financing non-recourse, and I think we pay a weighted average about 8%-9% in Brazilian real denomination.
Thank you. You don't see any potential to restructure the financing in Brazil at this stage?
No, no. We're fine with this refinancing.
Thank you. Thank you.
Because it's in real, that's important thing.
Yeah.
Yeah.
We have on the revenue side, you know, let me say our charges in Brazil are, so to say, inflation protected, because when the year is over, we are looking on the inflation rate, and you can say that more or less, the fee increase is related to the inflation rate. Let me say also on the interest side, so we have a natural hedge, revenue in Brazilian real protected by this price escalator, and the refinancing for the CapEx is also in Brazilian real. We don't have any currency risk in Brazil. The remaining risk is just the translation of the profit from Brazilian real into euro.
Thank you.
Welcome.
Ladies and gentlemen, as a reminder, if you would like to ask a question, please press Star followed by one on your touch tone telephone. The next question is from the line of Andrew Lobbenberg from HSBC. Please go ahead.
Oh, hi there. Can I ask a little bit about the latest view on your competition with your rival in Bavaria? I think Ruxandra was trying to get us to look at Lufthansa's guidance of 80% capacity for the summer and see what it means for you. Through the pandemic, certainly there was a concentration of their capacity with you because of your great cargo attractiveness. Is there a risk that as they bring capacity back, that your share actually dilutes and we get disproportionate growth in Munich? Or do you think you can keep your current share of Lufthansa? Can I ask a little bit more about the delays that you referenced? Are they all on the ground handling side or are there...
You know, are there any problems in the terminal? Obviously I'm always interested in the security and hoping that we can get a clear path for it to improve. I mean, are security processes in a state to improve yet, or you haven't got your arms around it yet? Yeah, that'll do. Thanks.
Thanks very much, Andrew. What we have seen over the pandemic is that airlines, Lufthansa, but in general airlines, especially on the intercontinental side, concentrated their traffic very much on the main hub, so at Frankfurt. With the recovery path now, this will of course not stay on that absolute level, on this relative level. That's clear because there's also other catchments and what we would expect is that over the time, the more the recovery is going ahead, we will come somewhere back to the old relations, if you want, market shares and so on. Whether we can keep at the end a percentage point more market share could be, that's early, but on the other side, we also don't see any shift from Frankfurt to Munich.
If you have seen, for example, this year or last year, Munich suffered very much. They have been on a very low level of traffic, especially on the intercontinental side. What we know is that with the recovery path now, the one or the other route will be reopened also from Munich, and that makes sense, or from Zurich, even if I would like to have all the traffic, that's not realistic. It's not a shift in a way that they put an aircraft from Frankfurt to Munich, but it's with all the reactivating on aircraft that in the second phase, third phase of the pandemic, more and more aircraft will also be reactivated on the Munich side. On the delays, no, that's not just ground handling.
There's a lot of reasons, but if I go through the processes in general, security was quite good this year. There are small waiting times, so the federal ministry hired a lot of people, and that worked quite well. It's more that with all the documentation checks, more transfer passengers, but also on all the native passengers, it takes more time. Well, simply, people, passengers are not any longer so much used to fly, so it takes also more time on the security side, even if it worked without long waiting times, but it takes more time, and it's the same on the border. Immigration and so on. It takes also more time with all the document checks on that side, especially on non-EU traffic.
At the end, we have some passengers who are not making it up to the aircraft, so we have the baggage which has to be deloaded and so on. The loading teams have to be longer on an aircraft, loading longer on an aircraft and also with the boarding and deboarding processes, which are not even so smooth as before the crisis. It's not the one point. There are several points in the process where everything has to come together and then we're still in a recovery phase, so it will take some further months on that side. The security process is at the moment not the pain point, not at all.
I think that was the second question, and your final question.
Yeah. No, that's perfect. Thank you.
The next question is on the line of Nicolas Mora from Morgan Stanley. Please go ahead.
Yes. Good afternoon, gentlemen. Just a couple of questions on the guidance. First one, looking at the net debt into year-end 2021, should we expect anything odd or actually unexpected in Q4? I mean, you raised the guidance on EBITDA, but it seems there's a bit of a loss contribution flowing down to net debt. So just trying to understand a little bit the bridge into the full year 2021 net debt. Second, quickly on Antalya, do you actually expect to get paid a dividend in 2021 considering the strong performance of the assets? Or should we wait for next year?
Do you have any idea of the scope of how much you could get out of the asset considering it's cash positive? Last one on Greece. I mean, the performance of the asset has been quite amazing. The traffic's recovering fast. All airlines are putting a lot of capacity into 2022. Beyond that, what's gonna really drive the results in the asset value? I mean, what do you need to make this a genuine key contributor and continue to push up the value of the assets? Is it just developing shoulder season traffic? Duty free? I mean, how can we drive basically more of this growth just beyond a catch-up on traffic? Thank you.
Yes. Do you start with the guidance net debt, EBITDA and so on?
Yeah. Before, let me say before we changed or improved our guidance.
We said that we expect an indebtedness end of the year of about EUR 6.5 billion. Now we improved our guidance, and this is directly translating also into an improved guidance for the indebtedness. As of today, starting from EUR 6.2 billion net debt on September 30th, I expect for the year-end EUR 6.4 billion. A clear improvement of about EUR 100 million on the debt side.
Included in those numbers is already an expectation, where we are working on to get it done on a dividend on Antalya this year still with EUR 25 million our share, which we hope to get through this year. Your third question, Greece. The midterm outlook. First, Greece is very attractive as a destination, I'm absolutely sure. It will continue to be traffic, that's clear. As on all airports, it's traffic, it's a tariff increase, and it's of course also duty-free and retail and all those things. Yeah, there's in addition positive things that we have to pay for some years less concession fees. This is also positive, so it uses the compensation we now got. We have to keep costs under control as we did up to now, and we are quite successful on that side.
We have to do what you said, to kit out the terminals as much as possible, so delay CapEx. This is at the end, so it was a general lecture on making a concession successful, and we'll try to do this.
In addition to this, what Stefan said, we have a very comfortable concession agreement in a way that there's an automatic escalation of the charges of 0.9% of the Greek inflation rate. We have positive price numbers, and even if they would go up in the future, which we do not hope in principle, but this on the other side, we have a perfect inflation natural hedge by this concession agreement.
Okay. Last one, if I may, I'll give it a try. You've talked a little bit about the outlook on traffic in 2022 remaining quite vague. I mean, can we switch to EBITDA? I'm not gonna get a number from you, but we've seen consensus numbers, some numbers and consensus hitting up to EUR 1.2 billion for next year. Where are you comfortable as of today, considering what you know on winter schedule and quite a, let's say, a fair amount of tailwinds on traffic into summer?
Yeah. I think at the end, so to be quite open and to you know this already, there has to be still a surprise for the next call. It's a little bit too early to give you all the guidance on that side. Yes, we have some expectations, and we'll try to get it done as best as possible. First, we have to get a better look on the traffic side, whether we can be so optimistic as mentioned, even up to 80% in summer, because that's the most important driver on that side. I'm quite optimistic on the ABTA side, and I know that I have a very good CFO on my side.
It will work, even if we have to be a little bit more conservative, what I mentioned on the scenarios regarding hiring of people, but that's just ground handling. It's not in general on the company, it's just on ground handling. Because at the end, you have to be able to manage even a sharper recovery of the traffic to keep market share and so on. Next call on that one.
Okay. All right. Thank you.
The next question is from the line of Dario Maglione from Exane BNP Paribas. Please go ahead.
Hi, Stefan Schulte. Just one question from me. Regarding the EU Fit for 55 proposals that you mentioned, how much traffic do you think is at risk to be captured by the Middle East hubs if all the proposals are approved? Thanks.
I'm more positive thinking, to be quite honest. I'm absolutely sure out of the discussions we had already with the European Commission that they fully understand our argument and that we will find at the end a way which gives us a clear path forward climate neutrality with the sustainable fuel obligations. That's absolutely right, but that will be competitive neutral. Because they see this point, and they don't want to harm the big airlines in Europe, the big hubs in Europe. They know how important they are for the connectivity of Europe, with the world, and I'm sure we'll find a way. If we have it, and if we can discuss this, and if we know the details, then we can discuss what is the remaining risk. From today's point of view, I'm still positive.
Okay. Thank you.
We have a follow-up question from Elodie Rall from J.P. Morgan. Please go ahead.
Elodie, can't hear you. The question is not any longer there.
You can't hear me?
No. Now we get you.
Okay. Sorry.
The further-
I just wanted to come back, yeah, on the cost savings section, question.
Oh, we get you. Thanks.
Can you hear me?
Yes, thanks.
Okay. EUR 500 million savings this year. How much is really sustainable assuming traffic at Frankfurt comes back to 100%? Say traffic at Frankfurt comes back to 100% next year. Should we assume that basically EBITDA at Frankfurt will just be EUR 400 million higher than it was in 2019?
Good question. You know, our targets, what we give you as a guidance for next year, the EUR 250 million personnel expenses plus EUR 150 million. On the personnel expense side, you have to see that when you look on the allocation of more than 4,000 FTEs, which we reduced. 50% is at the level of the AG, so the high paid admin and semi admin guys. We are going to continue with this lower number than before. On the other side, we have another 2,000 FTE reduction in services and in subsidiaries here at the Frankfurt site. There will be some compensating effect when we rehire some guys in the ground handling.
Here you have to see that the average payment, for example, in the FraGround, in our subsidiary, we pay an average EUR 40,000 per employee per annum. While on the admin side we have a lot of guys which had EUR 100,000 per year. So just looking on the FTE numbers is not, let me say, the key indicator. You have to look on the real expenses which we brought down. That's the reason why also looking for the next couple of years, we expect this EUR 250 million lower personnel expense level here for the Frankfurt side. On the material expense side there will be some ramp up. Perhaps at the end of the day, it's not EUR 150 million, it's about EUR 100 million.
This has indicated the range of sustainable lower cost basis in the future for the Frankfurt side.
If you then add better performing international business, but some inefficiencies on the recovering side because we still will have some peak structures next year. We are not on a full utilization then probably you are right with something like around 350 or whatever, because there are plus and minus and so on, around that level. That probably is the right number, but it's too early today to be quite honest. We will go through this process the next weeks and and we will pick the targets with our different units and but you get some first ideas in which rough numbers it should be.
Okay, thank you.
The next question is on the line of Johannes Braun from Stifel Europe. Please go ahead.
Yes, hi. Thanks for taking my question. I actually just have two left, which yeah both touch on the topic of fee increase and also regulation. Firstly, do you maintain the ambition to increase fees by 4%-6% per year over and beyond the 4.3% for next year? That's the first question. Within the regulation, be it the WACC formula or be it the definition of the regulated asset base, is there any aspect or any angle that you can think of that Lufthansa could potentially attack in order to prevent those fee increases to happen? Or is it all 100% watertight in your eyes?
First, I would say from our point of view it's 100% waterproof, but you never know if you are going in front of court or whatever, the court will check it. From our side it's 100% waterproof. Second point, I think we haven't given any indication that we will be in the range of 4%-6% per year over several years. What we can give you as an intention, yes, there will be fee increases over further years. That's absolutely clear. We haven't defined up to now which sites we will do it, what's necessary and what's market competitive, those ways. As an indication, yes, there will be further fee increases, but we haven't decided on the level.
Okay, thank you.
There are no further questions at this time. I hand back to Professor Dr. Seehusen for closing comments.
I'm taking over. Christoph Nanke. Thank you everybody for participating. If you have any further questions, give us a call in IR. Happy to look forward for the end of the year and hoping for good traffic, and a good time anyway. Thank you again.