The course has been set for the future development and economic stabilization of Klagenfurt Airport after months of negotiations. In the run-up to a crucial general meeting of the airport operating company, the city of Klagenfurt and the Carinthian Investment Management Company have agreed on a joint approach to a planned capital increase.
Despite its acute budget crisis, the heavily indebted city administration will participate in the financing measure, but due to its precarious financial situation, it will receive a two-year deferral of payment for its share of €2,37 million. The state of Carinthia, which already holds eighty percent of the shares through its state holding company, will temporarily advance the sum to prevent a potential dilution of the city's stake and a blockage of urgent infrastructure projects. This compromise paves the way for an investment package totaling nearly €11 million, which includes, among other things, the construction of a new terminal for private air traffic and the large-scale commercial development of unused land surrounding the airport.
The contractual details of the payment deferral and prevention of share dilution
The compromise reached on Monday morning, mediated by Carinthian state politicians, resolves a significant structural dilemma. As a minority shareholder with a 20 percent stake, the city of Klagenfurt is obligated to participate proportionally in the capital increase to maintain its full right to have a say and participate in the airport company's governing bodies. Without this agreement, the city's share would have automatically shrunk from 20 to 15 percent as a result of the capital increase, causing the municipality to lose strategic control rights.
The contractual agreement now stipulates that the city of Klagenfurt will only have to repay the requested €2,37 million to the Carinthian Investment Management Company by June 30, 2028. Securing this extension is considered a significant achievement by the city's finance department, as the city budget, currently undergoing consolidation, does not allow for any unforeseen multi-million euro investments. The official resolution on this agreement is to be passed at a special session of the Klagenfurt City Council, where a secure majority is expected due to the broad political participation in the negotiations. To safeguard future financial obligations, the city has also announced that it will commission an external financial expert to continuously review all further capital measures at the airport.
Strategic development plans and economic utilization of open spaces
The fresh capital, which will amount to almost eleven million euros following the resolution of the general assembly, is intended to modernize the regional airport, which has been stagnating for some time, both technologically and economically. A key sub-project of the investment program is the construction of a new General Aviation Center. This specialized terminal is designed to professionalize the handling of private and business aircraft and establish Klagenfurt as a destination for high-end business travel in the Alps-Adriatic region. In addition, comprehensive renovation and modernization work is planned for the existing passenger terminal to improve service quality for scheduled and charter flights.
The most important long-term aspect for the airport's economic independence, however, lies in the development of approximately 44 hectares of non-operational land owned by the company. These areas are to be commercially developed through the granting of building rights and long-term leases to logistics companies and other businesses. The stated goal of the city and state is to fully finance the airport's ongoing operations in the medium term through the resulting continuous lease income. In this way, the facility, which directly secures around one hundred jobs in the region, will be permanently freed from dependence on public subsidies and regular grants from state and municipal tax revenue.
The background and the ongoing legal dispute with the Lilihill Group
The need for purely public financing of the airport stems from the failure of a previous privatization strategy. In 2023, the state of Carinthia exercised a contractually agreed buyback option, the so-called call option, to transfer the majority stake in the airport back into public ownership. Prior to this, the private investor Lilihill had held operational control for a period of five years and announced extensive expansion plans and real estate projects on the site. However, in the opinion of the public owners, these plans were not implemented to a sufficient extent.
The decisive factor in the buyback was a contractual safeguard clause: Because annual passenger numbers in 2022 fell below the critical threshold of 100.000, the city and state were granted the right to reverse the transaction. This process remains the subject of intense legal disputes, as the former investor contests the legality of the buyback. Despite this ongoing litigation, the public owners are now pushing ahead with the renovation independently. The state of Carinthia had already released its €9,5 million share of the financing at the end of last year. With the political agreement between the city and state, the required unanimity at the general assembly this coming Friday is a mere formality, allowing the blocked investment funds to be released promptly.