Infratil to buy German airport, create new Ryanair hub

Infrastructure investor Infratil has entered into a conditional deal to buy 90 per cent of Luebeck Airport in northern Germany.

The airport would become a new European hub for budget airline Ryanair.

Infratil said in a statement it would pay 13 million euro ($23.54 million) for the 90 per cent stake in the airport and would invest another 30 million euro in the airport.

Under the deal Infratil has a call/put option structure which would allow it to buy the remaining 10 per cent of the airport using a predefined pricing structure from March 2009 onwards.

Luebeck Airport currently serves around 600,000 passengers a year. Under a 10 year agreement, Ryanair has guaranteed a minimum number of passengers each year -- starting at 1 million for the year to October 2006 and increasing by 200,000 departing passengers each year.

If the purchase goes ahead, Ryanair has agreed to invest US$250 million ($453 million) on four new B737 aircraft to be based at the airport, and create over 200 new jobs in Luebeck.

The purchase is conditional on approval by the city parliament of Luebeck, which is expected by April 28. The deal is also conditional on planning approval being granted by September 30 to extend the airport's runway from 1802m to 2326m. The extension plans are currently being contested in the courts .

In the year ended December the airport generated a loss before interest, tax, depreciation and amortisation of 1.4 million euro and a net loss of 3.5 million euro. A similar loss was expected for 2005.

Infratil has an existing relationship with Ryanair as the owner of Glasgow's Prestwick airport where Ryanair has based five aircraft and carries 2.4 million passengers.

Shares in Infratil last traded yesterday at $3.36, having ranged between $2.77 and $3.72 over the past 12 months.

- NZPA