Coronavirus halts investments and 30% stake sale in Athens International Airport

In the darkest times of the country’s economic crisis, the steady increase in passenger traffic at Athens Airport was one of the few good news in the field of transport and the economy in general.

From 2016 onwards, when the country stabilized, “El. Venizelos” Airport jumped, breaking one record after another and at the end of 2019, it had managed to double its passenger traffic within a period of 7 years.

The Airport managed, in alliance with the institutions, to make Athens, after decades, a major touristic destination and to create conditions for big growth in the wider area of Mesogeia in Attica region, where the airport is situated.

The case of Athens airport would be a success story, a case study if the coronavirus pandemic hadn’t come to ‘dispel’ this nearly magical image. From the beginning of the year it seemed that there would be some turbulence, then February showed that an uncharted period is coming but March finally came sweeping years of efforts.

Now that the global pandemic is underway, passenger traffic is virtually close to zero. Flights are kept to a minimum and the sector of air transport looks bleak.

Concerns by the industry

Speaking to ypodomes.com, a senior airline executive of the country confirms that the damage to the industry is huge worldwide. The concern is obvious as he says “it is unknown at this time how the market will open. If no vaccine is found to provide a definitive solution, it will be questionable how the markets are going to move. We can assume that at first the domestic market will open and then the foreign markets. At the moment we see that each country (and therefore each market) is at a different stage of dealing with the disease, so we are talking about a complex regime that directly affects the operation of Athens Airport. These data can only be changed if the vaccine is found shortly. Then everything will change, the dynamics, the prospects, everything”.

Lufthansa’s announcement two days ago, regarding the fleet reduction, the discontinuation of Eurowings and the shrinking of Brussels Airlines, Austrian Airlines and Swiss Air, came to confirm the fears of many, that the recovery of air transport has a difficult road ahead.

Investments and 30% stake sale halted

According to safe information of ypodomes.com, the investments for the extension of the airport, which reach 500m euros in the long run, are paused until further notice. The huge drop in passengers, the new reality and the uncertain future at the moment, unfortunately do not allow the ambitious plan of the airport to be maintained.

However, the target of investments remains and will return when the passenger traffic of “El. Venizelos” reaches pre-coronavirus levels.

According to the same sources, coronavirus also caused the postponement of the tender for the sale of the 30% stake. The process initiated by HRADF last summer has been informally postponed for 2021, as at this time it would be at least suicidal to talk about selling shares. The tender will be reactivated here as well, when the conditions allow it and with a view to ensure the public interest.

At the same time, AIA, always according to well-informed sources of ypodomes.com, made the first move to claim compensations from the Greek State.

Allegedly, a letter has been sent, in which the airport has invoked an article of the concession agreement that provides for incidents of force majeure and consequently a pandemic.

The legal framework exists and is now a matter of choosing the time to claim damages. Here, it is worth mentioning that the Greek state is still the major shareholder of the airport with 55% and this makes the whole process even more interesting.

Change of plans

There is an open line with the Ministry of Infrastructure and Transport, but for the time being, as it is expected, the focus is on the pandemic and its containment.

“The talks about the next day must start from now as airports are critical infrastructure. Priority should be given to planning how the markets will be opened, what will be the operating framework of Athens Airport and of course the rest of the country”, the same airline executive underlines.

One of the country’s great assets is its highly successful strategy against the virus. The statistics have been the subject of many articles and have caused admiration worldwide. As this point, emphasis must be given on the day after the crisis in the country and how it can capitalize on the reputation it has gained in order to boost tourism and aviation.