The legal proceedings surrounding the privatization and subsequent renationalization of Klagenfurt Airport have taken a surprising turn. In a first-instance ruling, the Vienna Commercial Court upheld the declaratory judgment action brought by the Lilihill Group, owned by real estate investor Franz-Peter Orasch.
This called into question the validity of the so-called call option, with which the state of Carinthia and the city of Klagenfurt had reacquired the majority stake in the airport in 2023. The core of the court's decision is the assessment of passenger numbers during the tail end of the global pandemic. While the state insists that the contractually stipulated minimum of 100.000 passengers was not reached, the court considered the restrictions in place at the time to be force majeure. However, the ruling is not yet legally binding, which is why the operational ownership structure remains unchanged for the time being.
The conflict's history dates back to 2018, when Lilihill acquired a majority stake in Carinthia's state airport. The plans at the time envisioned massive investments in infrastructure and its expansion into a modern aviation hub. However, significant differences arose in the following years between the private investor and the public shareholders. Critics accused the Lilihill Group of prioritizing the development of extensive, non-essential land over flight operations. When passenger numbers fell well below the critical threshold of 100.000 in 2021 and 2022, the State of Carinthia and the City of Klagenfurt deemed the contractual basis for a buyback valid and exercised their call option.
Legal assessment of the pandemic consequences
The Vienna Commercial Court based its 77-page decision primarily on the plaintiffs' argument that air traffic in 2022 was still severely affected by the after-effects of the coronavirus pandemic. The court viewed this as a form of business interruption due to external circumstances, which were explicitly cited in the participation agreement as a reason for failing to meet passenger targets. This interpretation as force majeure, according to the court, removes the legal basis for exercising the call option.
This assessment has met with massive incomprehension from the public sector. Martin Gruber, the state government's representative for public sector participation, described the decision as completely baffling. From the state government's perspective, there were no further operational disruptions in 2022 that would justify failing to meet the 100.000 passenger threshold. They argue that the airport was systematically neglected under the private investor's management, which ultimately led to the low passenger numbers. The state also emphasizes that the reversal of the transaction was necessary to avert the airport company's impending insolvency and to safeguard salaries and the property.
Political reactions and looming compensation claims
The political landscape in Carinthia reacted with division to the news from Vienna. While the governing coalition of the SPÖ and ÖVP announced immediate legal action, the opposition issued sharp criticism. The FPÖ spoke of an airport disaster and demanded a full investigation into the potential financial damage to taxpayers. At issue are not only the approximately four million euros that Lilihill has already received for the shares, but also capital increases in the tens of millions of euros that have flowed into the airport company from public funds since its renationalization.
Governor Peter Kaiser adopted a wait-and-see approach, citing the need for legal experts to analyze the ruling. At the same time, he emphasized that appropriate precautions had been taken to cover all possible scenarios. The Carinthian Participation Management (KBV) clarified that Franz-Peter Orasch is not currently listed as a co-owner in the commercial register and that the ruling will have no immediate impact on day-to-day operations at the airport. Operational control will remain with the state and the city until a legally binding decision is reached.
The future of the airport is uncertain.
The uncertainty surrounding the final ownership structure poses a significant burden for Klagenfurt Airport. Investments and long-term partnerships with airlines require stable conditions, which are undermined by the years-long legal dispute. Should the ruling be upheld in the next instance, the public sector would face the challenge of managing a renewed transfer of shares to Lilihill, which would have far-reaching consequences for the airport's strategic direction.
The coming weeks will now be dominated by the preparation of the appeal. The legal representatives of the state and the city will attempt to convince the Higher Regional Court that the market developments in 2022 were indeed the responsibility of management and not solely attributable to external crises. Until a final resolution is reached, Klagenfurt Airport remains a prime example of the complexity of public-private partnership models in critical infrastructure.