Government pushes to buy Budapest Airport below market price

The Hungarian government has made a bid to buy out the consortium operating Liszt Ferenc International Airport, Bloomberg reported, citing sources.

The offer follows a previous unsuccessful attempt from last autumn to buy out the current owners of the Budapest international airport, currently owned by GIC, Singapore’s sovereign wealth fund, a Canadian pension fund, and AviAlliance, an airport management company.

In November, Bloomberg reported that the government blocked Budapest Airport from receiving an emergency loan from the European Bank for Reconstruction and Development’s (EBRD) pandemic emergency fund. The blockage of the disbursement of the €50 million loan was surprising, as normally the national approval is a formality.

The majority owner has rejected the government’s accusations of low upkeep standards and complained to the European Commission in April about what it perceived as government pressure.

In an interview in June, Innovation and Technology Minister László Palkovics admitted to the government’s intentions of buying the airport when he said: “It would be best if the state could work to raise service standards [of the airport] not only as a regulator, as a manager of development funds and as a strategist, but also as an owner.”

In recent years, the airport’s revenue, privatised in 2005, has grown significantly, increasing by 43% in the last three years, reaching €331 million in 2019.