State grants €5 million in aid to Ljubljana Airport operator
The Slovenian government has approved state aid amounting to five million euros to the operator of Ljubljana Jože Pučnik Airport - Fraport Slovenija - pending approval from the European Commission. The amount corresponds to about a third of the estimated losses the operator expects as a result of the coronavirus pandemic. Fraport Slovenija is wholly owned by Germany’s Fraport Group. The Slovenian operator estimates it will lose some 15.3 million euros this year as a result of Covid-19. The calculation is based on the decrease in operating profit (EBIT) compared to 2019. Passenger numbers this year are set to decline by 80%, with the airport achieving just 18% of last year’s result. Currently, only three airlines maintain scheduled flights to the Slovenian capital, which handles 97% of all air traffic in the country.
In a statement, the Slovenian government said, “State aid will be essential to ensure Fraport’s liquidity and the development and operation of infrastructure at Ljubljana Jože Pučnik Airport. It will cover existing operating costs (materials, services, salaries, taxes) and necessary investments”. The airport is in the process of developing a new terminal building, which is set to open in July 2021. It has implemented a number of austerity measures in an attempt to cut costs with all investments planned for this year being halted, except for the new terminal. Projects which have been shelved for the time being include the expansion of the apron and the development of a staff car park. The airport has also reduced its workforce.
The funds granted to Fraport Slovenija meet the European Union’s state aid legislation. It will be granted in the form of a one-time non-refundable payment. However, the European Commission will have to review and approve the aid before it can be forwarded to Fraport Slovenija. The Slovenian government recently allocated five million euros to stimulate foreign airlines to maintain flights to Ljubljana and is mulling the creation of a new national carrier with a 76-million-euro investment. The European Commission has approved the subsidies aimed at foreign airlines but is yet to receive a proposal for the new flag carrier which will form part of the country’s Recovery and Resilience Plan, to be funded by the EU through 1.6 billion euros in grants and 3.6 billion euros in repayable funds. The state has completed a draft of the plan and hopes to formally submit it to the EU for review by the end of the month.
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