In the struggle for the future of Klagenfurt Airport, the state of Carinthia (via K-BV) and the city of Klagenfurt are trying to regain control of the airport, initially without using the call option. This is made possible by the simple fact that majority owner Lilihill – in contrast to the minority shareholders – did not pay in the unanimously approved capital increase.

This leads to the so-called dilution of Lilihill's shares. With a little extra money, the city of Klagenfurt and K-BV can get the majority and thus control over the airport. At the top of the public sector's agenda is the dismissal of the current airport management. If it is up to Deputy Governor Martin Gruber (ÖVP), the call option should then be used as quickly as possible in order to get Lilihill completely out of the circle of airport shareholders.

The city of Klagenfurt has repeatedly emphasized that it is interested in the continued existence of the airport and, if necessary, will carry out a further capital increase on its own. The state of Carinthia wants to stay on board and the responsible deputy governor Martin Gruber (ÖVP) has already made it clear that they will also shoot. The sudden urge of the public authorities to put more money into the loss-making regional airport is not entirely coincidental, because behind it there is also the chance to dethrone the majority owner Lilihill. The eternal discussion about the call option would then be off the table, because if a capital increase that has been decided is not paid in, there can be so-called dilution, i.e. a reduction in the shares. Together with the city of Klagenfurt, K-BV would then be number one again and then the management appointed by Lilihill could be kicked out without their consent.

Formalities could also be a game of time

A few days ago, the K-BV board of directors publicly criticized the fact that the airport managing directors have so far refused to formally report the payments already made by the public sector to the commercial register court. According to K-BV boss Payer, an appropriate legal remedy will be initiated to secure the damage. Both events should not be a coincidence, because Lilihill gains time with every delay. From a formal legal point of view, there is only a dilution when the responsible commercial register court has made the entries in the register. And that can take time if there is a legal dispute about reporting and implementation.

In any case, the city of Klagenfurt will soon hold a special municipal council in which the necessary resolutions for the intended regaining of the majority (together with the K-BV) are to be made. The state investment company has also convened a supervisory board meeting in which the course is to be set. In this regard, the state government and possibly also the state parliament have a say, but the SPÖ does not seem to be showing any resistance. More and more voices can be heard from all the parties represented in the Carinthian state parliament, demanding that the public sector should take control of the airport again.

Wage problems probably brought rethinking in the SPÖ

The events of the last few weeks are likely to have led to a rethink, because wages and salaries were paid late due to an "accounting error" - mind you, after receipt of the capital increase from the minority shareholders - and the bad news to the employees, which was distributed at the end of April 2023 not exactly well received within the governing party SPÖ. In a media release, the ÖGB, which is traditionally close, demands immediate payment of salaries.

However, the late payment of wages and salaries that was actually promised for Friday, May 5, 2023, did not take place, much to the annoyance of those affected and the employee representatives. The works council speaks of a "huge mess". Instead, the employees received a circular in which the payment on May 15, 2023 is promised. In this letter from the airport management, the blame is indirectly placed on the recent events in the Supervisory Board pushed. Although one does not call the child by its name, one describes the fact that the contract entered into with Liliair did not get a majority. But not a word is said about the fact that majority shareholder Lilihill has still not paid in its share of the capital increase.

Irrespective of the outcome of the showdown between Lilihill and the public sector, the core problems at Klagenfurt Airport are long gone. There used to be more than half a million passengers a year, but the state governments under Jörg Haider paid for them with expensive subsidies. As soon as the contracts expired, Air Berlin (formerly Hapag-Llyod Express), Ryanair and other low-cost airlines turned their backs on the airport. In addition, years later the European Court of Justice declared these subsidies to be illegal. What's left is a shambles, which was also badly run down, because only what was absolutely necessary was invested. If you talk about Klagenfurt in the airline industry, you often hear that people first ask how many subsidies there are for taking off from this airport at all. Or whether one is fully chartered through an airport subsidiary? Yes, that also happened in the past in the form of a Condor B757, which was used on the routes to Berlin and Hamburg. The economic risk lay entirely with the airport and not with the German holiday airline. It wasn't illegal at all, because anyone who can put the necessary change on the table can charter an airplane. It was probably not conducive to the sustainable development of the airport.

Politicians are already dreaming of golden times

The sale of the majority to a private investor should bring the real salvation – after years of losses, which should not actually exist due to the airport charges law, which is reminiscent of socialism. At first it looked as if a consortium around Haselsteiner, Glock and Co would strike, but the airport went to Lilihill around Franz Orasch. It was prevented that he completely took over the shambles and the original harmony was only of a very short duration. Since then, there has been a constant dispute between parts of politics and Lilihill.

Aside from the mounted Lilihill logo and minor cosmetic tweaks, not much has been invested. The announced growth didn't really go ahead either, with Corona being a factor that nobody had counted on. According to the motto "easy won, easy melted" Ryanair was inspired to make a comeback, but shortly afterwards Eurowings was lost as a customer. And Austrian Airlines? The hub connection has been gradually thinning out for many years and you don't have to be a genius at calculations: the Embraer 195 model is expensive for the carriers on this route. Who knows, after all, the AUA wants to apply for subsidies for Ljubljana-Vienna and these could then definitely make Klagenfurt even more "uneconomical". The reasons for the previous adjustments and reductions in domestic traffic were mostly environmental protection and in general: To Gewessler, they have publicly committed themselves to one day only traveling by train within Austria...

Both representatives of the city of Klagenfurt and members of the Carinthian state parliament now regularly send out messages in which they see a bright future for the airport when it comes back into full public ownership. It is not mentioned that the main reason why the majority of this was privatized in the first place was decades of squandering through party book management and a completely screwed-up “sponsorship policy” with regard to airlines.