Modlin airport desperate for state aid, as private buyer Egis circles

The state-owned company PPL owns 28%, Mazowieckie Province owns 36%, and Military Property Agency owns 32%. In 2020, only 800,000 people used the airport, and this year it is expected to be around 1.1 million.

Little by little, they reduced their losses until the pandemic happened. Now, the airport in Modlin, alternative to Okęcie, is sending an appeal to the government – money is needed for the airport to start earning. There will be resistance from the state shareholder and his plans to build an airport in Radom.

Even in 2019, when the airport handled 3.1 million passengers (Okęcie had 18.9 million then), there was a net loss of PLN 6.3 million. A year earlier, the loss was PLN 17.3 million, and a year earlier, PLN 2.9 million. The revenues grew, but the costs were also rising, mainly of external services – according to the company’s financial statements published in the National Court Register. Marcin Danił, vice president of the airport near Warsaw, however, indicated that before the pandemic, Modlin was already earning about a million zlotys a month.

The pandemic last year stood on the way to sustainable profitability. Since it was not possible to earn with 3 million passengers, then with 1.1 million it should be even more difficult. That is why the airport is appealing for funding.

The management board wants to build a new terminal, develop infrastructure and gradually increase the number of passengers. – By 2029, we could serve 4.2 million passengers a year and achieve a profit of PLN 23 million – said Vice President Danił.

One of the shareholders – Przedsiębiorstwo Państwowe “Porty Lotnicze” (“Polish Airports” State Enterprise) – does not agree to the extra money. It currently has 27.8 percent. shares. The company calls investing in Modlin “a waste”, arguing its decision with the lack of profitability of the airport.

“In the record-breaking year for Polish aviation, this airport was still recording losses. This makes granting state aid extremely difficult in the light of EU regulations. When we talk to officials from the European Commission, they say in a simplified way that a company that was profitable, and due to COVID-19 and introduced restrictions, began to incur losses, of course, you can help. On the other hand, if the company has been structurally loss-making for many years, then subsidizing a permanently unprofitable enterprise would be illegal public aid”, said Marcin Horała, government plenipotentiary for the Central Communication Port.

There is a general rule that approximately one million passengers a year makes the airport in Poland profitable. This airport had 3 million passengers and is still unprofitable, added the deputy minister.

In March this year, Egis company came to the Modlin Airport, interested in taking over some shares in the airport. It is the manager of 17 medium-sized airports around the world. The company’s representative praised Modlin for the speed of reaching 3 million passengers.

If Modlin collapses, several thousand people working at the terminal will lose their jobs, including 2500 employees of the airport itself and 300 Ryanair employees. About 500 million pln committed at the airport will also be wasted, of which PLN 170 million from EU funds.

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