Hochtief could file multi-billion claim over Budapest Airport

The recent collapse of Hungarian airliner Malev, which accounted for some 37% of Budapest Airport’s annual business, could trigger a compensation claim from the airport concessionaire of up to $3.6bn. Hochtief owns 49.7% of Budapest Airport.

The consortium operating Budapest Airport – led by German developer Hochtief – could be in line for a multi-billion dollar compensation payment from the Hungarian government. 

The potential claim – which Reuters estimates could reach $3.6 billion – follows the collapse of Hungarian national airliner Malev, on February 3, which accounted for some 37 percent of Budapest Airport’s annual turnover. The airline’s collapse triggers a compensation clause in the airport’s 75-year concession contract which could make the government liable for a large payment.

A spokeswoman from Hochtief declined to comment on the potential size of the claim, but did say that “grounds exist for filling claims for compensation”. She explained:

“In its White Paper of December 2011, the Hungarian government stated that in the event of a discontinuation of operations by Malev, claims by the airport partners could arise. The airport and its owner-parents are currently examining the realisation of such claims. This will take some time [and] any realisation of the claims also depends on the Hungarian government.”

It’s not all doom and gloom for the airport concessionaire, though. In a statement published on Wednesday, Hochtief Airport, the developer’s airports division, said that “just five days after the national carrier stopped flying, Budapest Airport is delighted to report that in more than 60 percent of the Malev point to point traffic has been recovered,” thanks to new business from several other airlines.

Still, the “complete loss of 1.5 million annual transfer passengers and income generated by them creates an extremely difficult financial situation for the airport,” Hochtief Airports pointed out.

In addition to Hochtief, which owns 49.66 percent of the airport, other shareholders in Budapest Airport include Canada’s Caisse de depot et placement du Quebec (18.16 percent), a subsidiary of the Singapore Investment Corporation (18.16 percent), Goldman Sachs Infrastructure Partners (10 percent) and KfW IPEX-Bank (4 percent).

The Hungarian government first sold a 75 percent stake in the airport to the shareholders in 2007, with the partners acquiring full ownership of the airport last year, after the government exercised a put option to sell its remaining 25 percent holding in Budapest Airport.