The Hungarian government did not let Budapest airport access emergency Covid-19 funding.
Due to the pandemic, the number of flights has dropped significantly, so Budapest Airport has applied for a 50-million-euro short-term loan through the Solidarity Package program of the European Bank for Reconstruction and Development (EBRD).
The traffic of the Airport has dropped by more than 99% during the spring, which resulted in major job cuts, reported Bloomberg. They would need the funds to stabilise the airport’s financial situation, ensure business continuity, and to be able to pay employees. According to their sources, however, the Hungarian government vetoed their request and told the EBRD to remove it from their agenda.
The sources also say that it is unprecedented for a government to block funds for its own country, and this may result in pushing down the valuation of a strategic asset.
The EBRD has provided support for other airports in the region. When asked about the request for Budapest Airport funds being blocked, neither the bank, nor the Hungarian government had any comment on the issue.
Bloomberg previously also wrote about Orbán wanting to gain back control over Budapest Airport, but until now, it had been out of reach due to its high valuation – until the pandemic kicked in. In April, the Airport lost almost all of its traffic, and in September, it was announced that 236 jobs would be cut.
To approach the owners of the airport, a consortium including Mol Nyrt. (partially state-owned oil refiner) chose Daniel Jellinek, the head of a local real-estate development company called Indotek, which previously did business with Orbán’s family. This year, Indotek bought the stake of István Tiborcz, Orbán’s son in law, in a listed real estate company. The company has been expanding recently: last month, they bought a 24% stake in Waberer’s international road haulage firm.
Budapest Airport has three owners: Singapore’s sovereign wealth fund, GIC, a Canadian pension fund, and AviAlliance, an airport management company that is in turn owned by another Canadian fund. They have no plans of selling the airport that was one of the world’s fastest-growing mid-sized hubs before the pandemic.
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