MORE...

Flughafen Lübeck GmbH ("Lübeck Airport")

FAQ | People | IAEL Financial Summary | Media Gallery

Profile

On 6 December 2005, Infratil acquired 90% of Flughafen Lübeck GmbH ("Lübeck Airport") from the City of Lübeck, following ratification of the conditional agreement announced on 25 October by the Lübeck City Parliament with a strong majority (44 votes in favour, 5 against) and subsequent authorisation by the local authority supervisory body Kommunalaufsicht Schleswig Holstein.

This agreement replaced an earlier conditional transaction announced in April, which did not proceed due to an adverse court decision stopping the planning approval for the Runway Extension Project (see separate section below). This purchase agreement incorporates various changes to the original transaction reflecting the circumstances.

Location of Lübeck Airport

Lübeck Airport is located 9 km south of the centre of the city of Lübeck in northern Germany.

Lübeck is an attractive destination in its own right, being one of the most visited cities in northern Germany.

Founded in 1143, the port city rose to become the "Queen of the Hanseatic League", a powerful medieval trading organisation covering the Baltic Sea and much of northern Europe (hence the official name "Hansestadt Lübeck"). Since 1987 Lübeck's Old Town with more than 1,000 listed buildings is designated by UNESCO as a part of the World's Cultural Heritage.

Today, Lübeck has around 210,000 inhabitants, the expanding port is Germany's third largest, with particular importance for the trade with Scandinavia. It is also Europe's largest ferry port with regular ferry connections to Sweden, Finland, Russia and the Baltic States.

Lübeck is the base for a number of world-class manufacturing companies, for example Dräger, a leading supplier of medical technology and Niederegger, famous for its Lübecker marzipan.

Catchment Area

The airport is located 60km to the north east of the centre of Hamburg, Germany's second largest city. The recent opening of the new motorway A20 linking Lübeck with Rostock has significantly improved the accessibility of the airport, both towards the east and towards Hamburg.

Location and accessibility means that Lübeck Airport is an attractive alternative to Hamburg Airport, especially for people living in the east of Hamburg.

There is a direct express coach connection linking Lübeck Airport with Hamburg City's centre meeting all scheduled flights.

The completion of the new B207n road in late 2007 linking the airport directly with the City and the motorway has further enhanced the airport's accessibility and reduce the travel time to Hamburg City to 35 minutes by car.

In addition, the railway line Lübeck-Lüneburg passes along the immediate vicinity of the airport. The creation of a new railway stop in May 2008 has further enhanced the airport's public transport connections and will soon provide a link to Berlin.

Traffic

The airport's largest customer is Ryanair which markets the airport as "Hamburg Lübeck". There are links to London Stansted, Milan Bergamo, Pisa, Dublin, Stockholm Skavsta, Barcelona Girona and from October 2008, Frankfurt Hahn Ryanair's 2nd domestic route.

From March 2006, Wizz Air has operated a route to Gdansk in Poland, four times a week.

Wizz Air is is Central & Eastern Europe's leading low fare - low cost airline.

In parallel with the original transaction, Infratil had concluded an agreement with Ryanair for the creation of a base at Lübeck Airport. This agreement was conditional on Infratil completing the acquisition of the airport and the extension of the runway as envisaged in the Runway Extension Project before 1 November 2005.

Due to the adverse court ruling and the airport's resulting inability to extend the runway as planned, this agreement, in which Ryanair had agreed to guarantee a minimum number of passengers each year, starting at 1 million departing passengers in the year to October 2006, rising to 2.8 million departing passengers in year 10, has now lapsed.

Although the existing infrastructure does not allow Ryanair to establish the airport as a base, it remains committed to its existing services and continues to believe that the market can support additional services.

Details of the transaction

The key terms of the transaction are:

Initial purchase price for 90% shareholding: €27,000 plus the acquisition from the City of shareholder loans amounting to €10 million.

Deferred purchase price: Should the airport succeed in a revised planning approval application (for a runway extension, aircraft parking apron upgrade, additional carparking and terminal upgrades) and passengers reach 1.2 million in 2008, a second and final instalment of €13 million less agreed operating losses and a contribution to the planning approval application cost will be payable.

Should the revised planning approval application be unsuccessful, Infratil may put its 90% shareholding back to the City for the initial purchase price plus agreed operating losses, capital expenditure, planning approval costs & interest (option price). Should Infratil be entitled to exercise the put option, but decline to do so, the City may call for the 90% shareholding to be transferred back to it at the same option price.

Infratil retains an option to acquire the remaining 10% shareholding after 31 March 2009, with the price based off the current financial performance using a predefined price formula.

Once the transaction becomes unconditional Infratil will become the 90% shareholder and will consolidate Lübeck Airport. This is expected to result in a number of years of accounting costs being absorbed by Infratil as Lübeck will produce losses during the initial establishment period, which may be 5 years.

Facilities

The 220 hectare airport site is owned by the City of Lübeck and leased to Lübeck Airport. A new lease arrangement giving the airport the required long-term certainty forms part of the transaction.

The terminal facilities are located north of the runway and comprise two buildings and an integrated marquee.

Airport Development Project

Lübeck Airport had previous to Infratil's involvement been pursuing the extension of its runway from 1,800 to 2,324 meters, the expansion of the main taxiway and the upgrade of its Instrument Landing System ("Runway Extension Project"). The airport received the official planning approval for this project in January 2005, but in July the Upper Administrative Court (OVG) Schleswig granted an interim court injunction against the commencement of the Runway Extension Project.

Following detailed discussions between the airport, the City, the State government, the planning authorities and Infratil, it was agreed that a new planning application was likely to be the best way forward. Work to prepare such a new application, including the airside and landside expansion implied by a significant increase in the airport's passenger numbers, is completed and was submitted to the State in February 2008.

Lübeck Airport now has a planning permission

On March 3rd 2009 the planning permission was handed over from the Schleswig-Holstein Minister of Economics, Dr. Werner Marnette, to Lübeck Airport Managing Director Tom Wilson. The airport now has a valid planning permission to develop and expand. The decision very closely reflects the development purposes which were the subject of the application:

expand runway to 2257m

expand apron area

install ILS CAT II/III in direction 07 from West

build larger terminal and car parks

construction of more drainage

For further information please refer to the planning permission which is available on the Ministry’s website for download please click here

The proposed development is shown below.

The Runway Extension Project will be part funded by public grants.

Further Investments

The projected increase in activity will require further investment in terminal, car parks and related facilities over the next few years.

Our Businesses