Infratil's Luebeck airport plans hit snag 

The higher administrative court in the northern German state of Schleswig-Holstein has halted the expansion of Luebeck airport -- and potentially a $77 million deal by Wellington company Infratil to buy and upgrade the airport.

The extension of the airport runway from 1800m to 2324m, expanding the main taxiway and upgrading the instrument landing system are crucial to a deal by Infratil to buy a 90 per cent stake in the airport.

"Infratil has been advised that the relevant German court has declined to give planning approval at this time," Infratil director Lloyd Morrison said today.

"It is now unlikely that the conditional agreement will be confirmed in its present terms.

"Infratil will shortly meet with representatives of the city to discuss the full ramifications of this court decision."

The airport operator, Flughafen Luebeck GmbH, said in April that Infratil had agreed to buy the stake from the city for 13 million euros ($23.6 million) and to invest 60 million euros.

The airport company today published on its website an open letter critical of the decision, and expressing bewilderment that expansion should be stopped on the grounds of nature conservation.

It noted the area, 65km from Hamburg, already included a lot of sealed parking lots and approvals for building sites, and that military exercises with explosives were carried out in the areas where birds such as cranes bred.

It questioned whether priority could be given to the environment in an area with 19 per cent unemployment, and said workers had been let down by the decision.

Until now, Infratil has said that the deal to take over the airport is dependent on planning approval for the runway extension "becoming incontestable" by September 30.

Infratil, which has been seeking investments in European airports, has a deal with Europe's biggest low-cost airline, Ryanair, for it to establish a new base at Luebeck Airport.

It expects the Dublin-based airline to invest US$250 million in serving 2 million passengers a year with four new Boeing 737 aircraft operating from Luebeck.

But the Ryanair deal is dependent on the completion of the purchase agreement between the city and Infratil Ltd, which in turn depends on the final planning approval being given by the end of September for the airport expansion.

A spokeswoman for Ryanair said today it was starting to explore alternative sites because its cannot meet an October 31 deadline to open its new base at Lubeck. She said it was talking with number of other European airports, and the new aircraft would be deployed elsewhere.

Ryanair aimed to operate routes to Britain and the Continent from the airport, but it also has an operation at Fraport AG's Frankfurt-Hahn Airport and flies out of Dusseldorf.

Infratil owns a 66 per cent stake in Wellington Airport, 100 per cent of Glasgow Prestwick Airport in Scotland, 20 per cent in Energy Developments and 88 per cent in the Australian energy retailer Victoria Electricity (VE).

Infratil bought an initial stake in Glasgow Prestwick in January 2001 and took full ownership in March last year for a total investment of $85.3 million. Its key customer there is Ryanair but Glasgow Prestwick has not so far delivered the forecast revenues from passengers or freight.

Mr Morrison said recently that the company had not expected the loss of Scotland's computer assembly industry to Eastern Europe.

"We have got to make sure that Glasgow Prestwick works and that Luebeck works before jumping into too many other things," he said.

Shares in Infratil last traded up 3c at $3.94.

- NZPA