Budapest Airport owners send message to Hungary eyeing majority ownership in BA
Budapest Airport closed FY2020 with a loss of 110 million euros.
In spite of the unprecedented difficulties, however, the operation and financing of the company remain continuously stable, and its continued liquidity is well ensured
, it added.
“The financially strong owners, who are committed to the airport in the long run, spent the profit realized in 2019 on the crisis management of Budapest Airport, whereby the company financed its operation partly from its own resources and to a smaller extent from market-based funds, while also implemented numerous developments totaling 81 million euros in 2020, despite the drastically reduced sales revenues.”
Looking forward, the Budapest Airport is again ramping up operations and foresees a bright future ahead.
The statement comes after a confirmation by the Ministry of Innovation and Technology that the government was indeed looking at acquiring a majority stake in Budapest Airport, which currently has three foreign owners: the majority owner with a shareholding of over 55% is Canadian pension investment management group PSP; state-owned Singaporean investment fund GIC Special Investments, and Canadian airport operator Caisse de dépôt et placement du Québec both hold about 20% in BA.
Prime Minister Viktor Orbán has said he wants to see the airport in domestic hands, but until now its owners have expressed no interest in selling it.
The airport has been in state hands until 2005, but the state currently has no stake in it. There were reports in the local media in 2020 that real estate management group Indotek was part of a consortium in talks to buy Budapest Airport, citing Indotek owner and CEO Daniel Jellinek.
Budapest Airport said in its press release that 2019 was a record year in many aspects, and although things were looking up for the airport, the coronavirus pandemic drove it into the ground. In January and February, the monthly passenger number exceeded even the 2019 levels by 16% and 15%, respectively, but then passenger numbers dropped to less than half in March with the spread of the coronavirus, and even more drastically, by 99.3% in April.
The drop in traffic was stable at around 95% during the last few months of the year, and annual 2020 passenger traffic reached 24% of the 2019 volume. Due to the decreasing passenger numbers and the halting of the related services, the net sales revenue of the company was 118 million euros, 65% less than in 2019.
Budapest Airport was to some extent able to substitute the revenue lost due to falling passenger numbers with record-high cargo turnover and property revenues from some major tenants who are not dependent on passenger traffic, like aircraft maintenance and integrators.
“This showed the strength and the significance of the diversification strategy that the airport had pursued during the past years.”
BA stressed that despite all these challenges, its financial position has been stable and secure since last year.
Moreover, the operator carried out airport development in the amount of EUR 167 million over the last two years, with nearly 50% of that amount being spent in 2020, despite the severe impact of the pandemic.
This was partly provided through the support of its owners (who also reinvested the dividend from 2019 into 2020 operations) and to a smaller extent from own and other, market-based sources of financing.
Chris Dinsdale, the CEO of Budapest Airport said: “Following a year when many airlines and airports globally have received significant state support packages, Budapest Airport has weathered 2020 successfully solely with its own resources, and is currently financially extremely stable. As the pandemic eases, we see a bright future ahead.
The recovery has started, and we have begun hiring the manpower necessary for this. The airport is prepared to welcome moderate levels of traffic this summer, while 2022 is expected to again be a busy year, with high levels of passengers.
Cover photo: MTI Budapest Airport/Róbert Baranyi
