Central German Airport Holding crises worsens

The operating company of Leipzig/Halle and Dresden Airports urgently needs money – lots of it. If the public owners, the federal states of Saxony and Saxony-Anhalt, do not provide new funds, the parent company could face insolvency. This is stated in a letter from the Saxon Ministry of Finance. There is talk of 100 million euros of taxpayer’s money that the two federal states would have to inject for closing the holding company’s financial gap. Now they are squabbling over the amount each of them has to pay. 

What went wrong in the recent past with the East German airports run by the umbrella organization Mitteldeutsche Flughafen AG, the parent of Leipzig-Halle and Dresden Airport? Aviation experts throughout Germany wonder about the deficits accumulated by the managers responsible. This is all the more so as DHL Express operates its largest global hub at LEJ and feeds the airport with plenty of freighter ops as do its partners or affiliates like cargo airline AeroLogic, a DHL – Lufthansa Cargo JV (50/50%). Hence, freight traffic is running smoothly at LEJ, so it seems when looking from beyond the fence. But there were setbacks in recent times. Predominantly Amazon’s decision in late 2023 to close its LEJ hub for Prime Air ops that was set up only three years ago. A large and promising customer was gone, so were 400 jobs.

Handling agent PortGround is still part of the East German Airport holding but is to be sold. Courtesy: Mitteldeutsche Flughafen AG / PortGround GmbH

The 100-million-euro injection
In fiscal 2022, the Holding presented losses of 39.6 million euros, following a yearlong series of annual deficits. According to a KPMG survey, the gap in liquidity has reached 145 million euros and without new funds, the Holding is in danger of biting the dust.
Alarmed by this gloomy outlook, the stakeholders Saxony and Sachsen- Anhalt have decided to inject 100 million euros to stabilize the holding’s finances. In addition, management will kick off a restructuring program that includes cost cutting measures for convincing banks to grant new loans.

Dispute over funding
Saxony is the majority owner (77.29%) in the Mitteldeutsche Flughafen AG, while the neighboring state of Saxony-Anhalt holds 18.54%. The remainder is split between the cities of Leipzig (2.1%), Dresden (1.87%) and Halle (0.2%). According to the 100 million euro restructuring package, Saxony would have to shoulder 81.3 million and Saxony-Anhalt 33.4 million. Now there are reports from Saxony-Anhalt that the federal state does not want to contribute this share. Its state government questions to spend taxpayers’ money to Holding subsidiary, Dresden Airport, which is geographically closer to the Czech Republic than to Saxony-Anhalt’s capital city Magdeburg. “What benefits does distant Dresden Airport actually offer our own citizens?” voice the federal state’s policymakers with increased intensity. This controversy is currently hotly debated between both states with each of them governed by the conservative Christian Democratic Party.

PortGround for sale
According to latest plans tabled by the Holding management, its ground handling arm, PortGround (472 employees) shall be sold. In contrast to its parent, the handling agent is profitable for over a decade. Local media refer to Frankfurt-based CHI Aviation Handling GmbH as potential buyer. Since PortGround’s managing director, Alexander König questioned the divestment plans, suggesting partnership models instead, he was dismissed, with Holding CEO Götz Ahmelmann taking over the position in addition to his role as Holding boss. Critics complain that the supervisory board has not intervened so far. “We are facing a major crisis, but no watchdog is taking on a steering function,” one voice told CargoForwarder Global. This raises the question of the responsibility of the controlling bodies.  In this context, the fate of Andreas Schafhirt (62) remains unclear. The expert was supposed to develop a restructuring concept for the Airport Holding company. After familiarizing himself with the subject, he did not return to his job at LEJ. Since APR24, there is no trace of him. The police units involved in the case refuse to provide any information to the media.



Please enter your comment!
Please enter your name here

See Also