- 20 Sep 2023 7:01 AM
- Hungary Matters
Whereas the airport should be under national control, 1,500 billion forints (EUR 3.9bn) of public money should not be spent on such a deal in the current economic situation, he told a press conference.
Toroczkai said it was worrying that, based on reports, in addition to the 50-50 ownership share, Blackrock would have management rights, so the management’s work would lack transparency.
Could Nationalisation Make Budapest Airport More Expensive?
The Hungarian government's new offer is around €4 billion (1,500 billion Hungarian forints) for the purchase Budapest Airport according to Bloomberg.
If the bid is successful, passengers will be in the dark as to whether the airport will become more expensive under state ownership, paid for through air fares
- says aviation expert András Bognár of the London-based ICF consulting company, to Szabad Európa.
According to him, the airport is just infrastructure, and no one chooses their travel destination based on who owns the airport there, so it is not entirely clear what motivates the purchase beyond political goals.
Elsewhere, previously privatised airports are rarely bought back. Budapest’s is large enough for the private sector to run it successfully.
So it's a fair question why the government should want a part of it, just like any other economic activity run by the private sector.
The wave of airport privatisation in Europe started about 20 years ago, typically leaving smaller, less profitable airports in state ownership, noted Bognár.
Most of Vienna Airport is privately owned, while Frankfurt and Heathrow are completely private. An airport is considered infrastructure, like a toll motorway, said Bognár.
Since the 2005 privatisation of Budapest Airport, the government has introduced price capping on costs.
Passengers would be keen to discover whether this will continue to work in the future, whether the state will adhere to this monopoly regulation or lift it and change fees at its discretion. Currently, there is no information about the government's intentions.
In the case of a government buyer, Bognár believes it's unclear what constitutes a return on investment. They mainly justify the purchase with tourism development, but in this case, he thinks that this money should not be invested in the airport but directly in tourism, for example, in hotel construction. For more on this click here.
National Railway Upgrade Suggested Instead of State's Purchase of Budapest Airport
The money the government plans to spend on the takeover of Liszt Ferenc International Airport could instead be invested in comprehensive upgrades to Hungary’s rail network, the opposition Socialist Party said.
Hungary’s rail network “is in crisis, lacks funding, and there are not enough trains or staff”, he said.
Half of the money to be allocated towards the takeover of the airport would be enough to replace the entire rolling stock fleet, while the other half could be enough for comprehensive network maintenance, he said. For more on this click here.