The repurchase of Budapest Airport has been hailed by the Hungarian government as a significant economic milestone. National Economy Minister Márton Nagy stated that the deal would lead to rapid returns, predicting dividends exceeding HUF 100 billion by 2024. However, an analysis reveals a more complicated financial landscape.
Financial Overview of Budapest Airport Buyback
Budapest Airport Plc reported a net profit of HUF 41 billion, with approximately HUF 32.8 billion attributable to the state. The state’s investment, totaling HUF 1,453 billion, suggests it could take nearly 45 years to break even. Under more optimistic conditions, this period may be reduced to around 30 years.
- Net profit for Budapest Airport Plc: HUF 41 billion
- State’s share of profit: HUF 32.8 billion
- Total state investment: HUF 1,453 billion
- Estimated break-even time: up to 45 years
- Optimistic break-even scenario: around 30 years
Historical Context and Strategic Decisions
In 2005, during its privatization, Budapest Airport’s operating rights were leased to the British company BAA Ltd. for 75 years in exchange for EUR 2.5 billion for a 75% stake. By 2023, the Hungarian government repurchased the airport for EUR 4.5 billion. The state retained 80% ownership, while French company Vinci Airports obtained the remaining 20%.
This decision appears motivated by political ambitions rather than economic reasoning. The government views the airport’s return to state management as a strategic priority, despite previous unrestricted access for Hungarian companies to the Ferihegy air hub. Critics have expressed concerns that over HUF 1 trillion in investments could have been better allocated to areas such as education, healthcare, or transport infrastructure, which may yield quicker returns.
Infrastructure Developments at Budapest Airport
While debates about the economic feasibility of the buyback continue, the government is pushing forward with new infrastructure projects. Preparations are beginning on an express road to Liszt Ferenc International Airport, as a public procurement tender has been issued for demolition works.
- Investment Plan for airport accessibility: HUF 1,000 billion
- Projected cost of new road construction: EUR 500 million
- Completion timeline: 2 to 2.5 years
- Current public procurement value: HUF 11.8 billion
- Demolition of: 169 buildings, including over 30 large facilities
Special attention will be given to effective waste management and recycling throughout the demolition process. As the government commits extensive funding towards airport projects, the question remains: Was the Budapest Airport buyback a justified investment? Current estimates suggest the state might only see a return on investment around 2070, just before the original concession would revert to state control without cost.
