Interesting times lie ahead for Ljubljana’s Brnik based airport. Having taken their share holding of Slovenia’s main airport to 97.99%, German-based Fraport have invested the not insignificant sum of €234.4m to gain control of one of Central Europe’s most important but unheralded transport hubs.
CEO Stefan Schulte, on stating his belief in Slovenia’s future, has added tangible substance to his words by sanctioning a level of investment that is more a calculated risk than a speculative leap of faith. In aviation terms such amounts of money perhaps in this day and age will not buy a great deal but to the man in the street, a level of investment such as this would suggest that Fraport must know a good thing when they see it and, be confident of a fruitful future that will see a return on their financial outlay.
Critics will inevitably point to another key asset slipping out of Slovenia’s hands, at a time when approval rate of the incumbent administration is reported to be as low as 17%. Ljubljana airport is though too important to Slovenia, both as a gateway to the country for tourists and business travellers and as a strategically placed freight terminal linking up with much of the former Yugoslavia and the wider Balkan region, for it to continue to not punch at its weight, let alone above it. Despite the ‘fire sale’ atmosphere currently predominating through Slovenia, it is to be hoped that the requisite due diligence was conducted by the Slovenian government before sanctioning the initial 75.55% sale to Fraport, ensuring the capital’s airport was to be placed into safe hands. Whether this proves to be an astute decision or an unmitigated disaster, only time will tell. If Fraport can bring in an imaginative new route schedule and, keep Adria Airways onside by not imposing the rumoured swingeing increase to the charges it levies upon Slovenia’s national flag carrier, the future would seem to be bright. Privatization of much loved and established assets of national interest can invariably prove unpopular but such a process is often brought about by several different scenarios. While it is true to say that Slovenia’s financial situation is in a perilous state and therefore an injection of private-sector capital, be it Slovenian or foreign, would seem to be the only option available to keep impoverished institutions viable, assets that are under-performing due to stagnation, unimaginative and restrictive operating practices and, a lack of inward investment from a management structure more interested in sweating their assets until the pips squeak, can only benefit from passing into outright private ownership or where the state retains some financial interest and by definition, a say in the future direction taken.
The speed of change at Brnik under Fraport’s auspices will be viewed with great interest from within Slovenia and afar. It’s success or failure to benevolently exploit the airport’s potential to its optimum will, in effect, prove to be a critical test-case on whether the privatization course that Slovenia has now set itself on proves to be a template for the future or, an experience that should never be revisited.
Reporting on this story can be found at: The Slovenia Times: Brnik now 98% owned by Fraport