The Hungarian government to buy Budapest Airport?

The value of the airport is HUF 700-800 billion (EUR 2.245 billion), so the government would need a partner to do so, and experts already say it would be MOL, the leading regional oil and gas company. Of course, such amounts are not low neither for the government nor for the company. Furthermore, nobody would like to sell it, and even though it offered solid profit before the epidemic, today it seems more like a long-term investment for anybody interested.

According to hvg, the number of passengers was at a record low in September with only 88 thousand people, meaning a 70 pc fall. After the numbers came out, Bloomberg immediately wrote that a consortium led by Dániel Jellinek, the founder of the Indotek Group, made an offer for the airport. The newspaper said that

Orban’s allies would like to take control of Budapest Airport.

MOL said that they did not comment on any gossip, while Indotek Group stated that they continuously searched for investment possibilities and that they were conducting talks with Hungarian and American investors to buy Budapest Airport. Mr Jellinek added that because of the economic crisis, the airport was a good target.

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He also confirmed that the owners of the airport would like to sell it, but he cannot reveal anything else about the details.

Why now?

The answer is easy: the coronavirus epidemic destroyed international tourism, and even experts say that the sector can reach its 2019 volume only in 2022. Furthermore, nobody knows how effective the vaccine will be and whether people will travel by plane or use trains instead. Therefore, at first glance, it seems to be a good strategy to sell anything connected to tourism and international traffic.

Budapest Airport was profitable in the last few years, continuously rising from 2015 on. So,

airports are long-term investments that owners do not abandon because of some difficult years.

Moreover, the airport is one of the hubs of regional goods trade; that level increased by 2.1 pc in September. As a result, Bloomberg said that the owners would not like to sell the airport.

However, even if they did, HUF 7-800 billion is so much that it is

hard to explain for voters

why the government would spend that amount on buying the airport during the economic crisis. The price is also affordable for MOL and its consortium partners, but the crisis affected even the Hungarian oil and gas company badly.

Interestingly, this is not the first time that gossips started about a possible government acquisition regarding the airport. In 2019, Domonkos Schneller, the state secretary, slammed the quality of the service provided by the facility, and experts said that a pro-government oligarch,

Lőrinc Mészáros, would like to buy the airport.

Today, the majority owner of the airport is the Avialliance GmbH running the airports of Athens, Düsseldorf, and Hamburg. Meanwhile, the minority owner is the GIC investment fund’s (Singapore) Malton Investments Ltd.

Source: hvg.hu, bloomberg.com