Frankfurt Another German airport is bankrupt. Hahn Airport in the Hunsrück had to file for bankruptcy a few days ago. In February, the management of Lake Constance Airport in Friedrichshafen was forced to take this step. Last year, the management of Paderborn Airport had to go to the local court. And at the new capital city airport in Berlin there is a chronic threat of over-indebtedness.
The pandemic is shaking up the airport landscape. The airport association ACI Europe recently calculated that 193 European airports – especially the smaller ones – are on the verge of collapse. The airport managers are urgently looking for sources of money to hopefully survive the final months of the pandemic.
The problem: only those who meet the so-called ESG criteria (social, environmental and governance) still have a chance with investors. But flying and sustainability don’t really want to go together.
“Due to their fund guidelines, investors are increasingly forced to pay attention to ESG standards,” says Peter Smeets, founder and CEO of 360 Aircraft Finance GmbH (360AF), a financing specialist in the aviation industry. Nothing else applies on the debt capital side. More and more banks would set themselves the goal of continuously decarbonising their loan portfolio.
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“In the past few months I have spoken to 20, maybe even 25 banks,” reports Lars Mosdorf, CFO of Düsseldorf Airport. Everyone had the topic of green finance on the agenda and would ask questions about sustainability. “The expectations of investors are clearly growing.” When it comes to the climate, air traffic does not have a good image, admits Mosdorf: “And the industry is obviously not yet able to demonstrate its commitment to climate protection clearly enough.”
It is true that it helps the airport companies that they do not operate airplanes, but rather that they are viewed as real estate companies. “Airports are critical infrastructure. They have always been very attractive to investors and will remain so, “says Henning Block, Managing Director at Rothschild & Co:” But here too the issue of sustainability is extremely relevant for future refinancing. “
Airports must invest in climate neutrality
It is not just the political and regulatory requirements that drive this, according to Block. The financial sector itself is also required to address the issue of sustainability more and more in its investments. “In addition, consumers are becoming increasingly sensitive to ESG.”
Airports can react to this, but they have numerous levers to move towards climate neutrality. “When I show the banks what we as an airport have been doing since 2010 to become more climate-neutral, many are surprised,” reports Mosdorf from Düsseldorf Airport. And lists some of the individual measures: photovoltaic systems, a block-type thermal power station, e-charging stations, district heating or air conditioning in the terminal buildings, which depends on how much they are currently being used. “The switch to green electricity in January 2022 will further reduce our emissions significantly.”
But it all costs a vicious circle: in order to get money, airports have to show that they are sustainable. And to do that, they need money again. “Airports are traditionally user-financed. This is an ordeal for us. We cannot increase the fees as much as it would actually be necessary, ”says Mosdorf. You not only have to cover costs, you also have to keep investing. “In the existing infrastructure as well as in those future technologies that support our transformation to a CO2-neutral company. “
The airport operator has already taken some measures in Düsseldorf to become more climate neutral.
(Photo: dpa)
Block von Rothschild is nevertheless confident that many airports can raise the necessary money: “Such measures require further substantial future-oriented investments, for which there is a wide range of financing options.” Mosdorf from Düsseldorf also believes he can convince investors: “I am convinced that aviation and green finance go hand in hand. But it won’t be a walk in the park. “
It should look different at smaller airports. With their investments, investors will ensure that they invest in the airports that will surely survive the crisis. However, the bankruptcy in Hahn made it clear to everyone that there is no guarantee for it.
Growth in passenger numbers causes “great concern”
Especially since the crisis is far from over. The airport association ADV assumes that the passenger numbers at German airports will return to the pre-crisis level, but will not grow by 3.5 percent per year as before. We are talking about two to 2.5 percent. “This year we expect a total pre-tax result of minus 1.5 billion euros at the German airports,” says Ralph Beisel, Chief Executive of ADV: “We are very concerned about that.”
Once a regional airport has gone bankrupt, it becomes difficult. State operating aid is not a solution; the EU Commission has banned it from 2024. And so on the runway of the airport in Parchim, which has been insolvent for two years, a logistics company has been parking more than 2000 cars for international trade for a long time.
After all: Paderborn has worked its way out of bankruptcy again, and operations will probably continue at Friedrichshafen Airport as well. But a rescue is often only possible if private investors can be found who are willing to give their money – regardless of whether the airport is sustainable or not. The Zeitfracht Group, a logistics specialist, wants to buy the airport in Rostock-Laage and build a freight hub there.
There are also already prospects for Hahn, speculation in the aviation industry. Some want to secure flight operations on a permanent basis, others want to use the site and infrastructure for other purposes, it is said. However, the provisional insolvency administrator is still exploring the situation in the Hunsrück.
More: Wolfram Simon-Schröter: What the Zeitfracht board of directors is planning to do with Rostock Airport