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By Michael Rothe
Mayday! Financially, Mitteldeutsche Flughafen AG is up to its neck in water. Despite the promise of the Minister Presidents of Saxony and Saxony-Anhalt to pump 100 million euros into the permanently loss-making operator of Leipzig-Halle and Dresden airports, banks and credit agencies have significantly downgraded their rating for the state-owned group and cut the credit limit by two thirds compared to January. They speak of an "above-average default risk".
According to a restructuring report by the auditors at KPMG, a total of 145 million euros will be missing from 2024 to 2026. Banks had made state aid a condition for new loans and partial financing of the remaining amount. The company is expected to contribute 11.6 million euros itself: through a better operating result in 2023 and greater savings.
The smaller co-owners are tight-lipped. The city of Halle does not want to evaluate the rescue initiative. However, when asked by the SZ whether it would participate in the rescue package in proportion to its shareholding, it gave a clear answer: "No". In the past, it was repeatedly said that Halle and Saxony-Anhalt no longer wanted to be responsible for losses, especially at Dresden Airport, and possibly exit as co-shareholders. However, there are "currently no plans" for this, according to von der Saale.
The statement requested from Leipzig is even thinner. The city spokesperson sees "the main shareholders, the states of Saxony and Saxony-Anhalt, as having a duty". They are "aware of the enormous economic effect of the airport and support it to the best of their ability".
Expansion opponents announce state aid action in Brussels
The financial aid is "a compensation for expenses of a non-economic nature" - for example for the fire department - "and therefore not aid that is relevant to competition", according to the commitment of Prime Ministers Michael Kretschmer and Reiner Haseloff (both CDU) to safeguard MFAG.
Not everyone sees it that way. The Interessengemeinschaft Nachtflugverbot, an initiative of noise-disturbed residents at Leipzig-Halle Airport, intends to lodge a complaint with the EU Commission in Brussels.
The company needs to reposition itself. Ex-Condor boss Ralf Teckentrup, who is regarded as an aviation expert, drops by once a week according to his consultancy contract and earns some extra money as a pensioner, is to help with the transformation process - commissioned by the Supervisory Board and paid by MFAG. The restructuring concept envisages the reduction of 124 jobs over the next three years.
The image of severe turbulence is not suitable, as it would only speak for external influences. No matter how hard the management of the state-owned company tries to blame its problems on coronavirus, the war in Ukraine, the energy crisis and inflation: The disaster is first and foremost home-made and the result of mismanagement, nepotism, the Supervisory Board looking the other way and state politicians ducking out. Observers agree on this. One calls it "organ failure".
The entire aviation industry has suffered from the adversities of recent years, and there are no mitigating circumstances. "The coronavirus crisis has affected Leipzig-Halle Airport even less than all other airports in Germany because DHL has flown more often - not least due to the boom in online shopping," says an insider. Although passenger traffic has collapsed, it has never been big business in Leipzig - in contrast to Dresden.
Supervisory Board looks for leaks in its own ranks
The Supervisory Board of MFAG, which is 77 percent owned by the Free State of Bavaria, will meet on Monday. The management around CEO Götz Ahmelmann will then have to come clean. The 2023 balance sheet is on the agenda, and the new chief restructurer Michael Hengstmann, who was appointed to the Management Board two weeks ago by conference call, is also to introduce himself. And the aim is to find a leak in the otherwise secretive board. There is talk of a "forensic investigation".
In recent months, the SZ and other media have informed the public about the dramatic situation of the public corporation - to the displeasure of Supervisory Board Chairwoman Hiltrud Werner and the Saxon Ministers Hartmut Vorjohann (Finance, CDU) and Martin Dulig (Transport, SPD). They sit on the supervisory body on behalf of the main owner, but evade press inquiries about the tax-funded MFAG. The Ministry of Finance even sends answers to the company controlled by its boss before the questioner receives them.
In addition to the financial shortfall, there had recently been a lot of fuss about a restructuring manager who had disappeared in the meantime and was ultimately dismissed. Alexander König, the dismissed head of the handling subsidiary Portground, the only profit-maker in the Group, also made headlines. In addition, there was the constant uproar about noisy residents and the cheap contracts with postal subsidiary DHL to the detriment of Leipzig Airport. The aftermath and price of massive concessions to open a European air freight hub in eastern Germany in 2008 and create 7,000 jobs there.
Negotiations with DHL criticized
Negotiations are currently underway regarding new conditions and the early extension of the framework agreement until 2056. According to reports, the logistics giant would like to continue investing in its freight hub, including in a new hangar. In return, it expects stability and planning security from MFAG. However, "this is no longer the case - the management hardly seems capable of acting", according to informed sources. Discussions and processes are being delayed and communication is "no longer taking place at the usual professional level".
In the view of observers, the Group shows its largest customer too little appreciation - partly because CEO Ahmelmann was absent from meetings and sent "the second tier". DHL is prepared to bear the costs for the infrastructure and services used, they say. However, it was "not possible to compensate for MFAG's management and structural problems" - such as "operating losses at Dresden Airport and the enormous build-up of overheads in the Group".
The airport group has a different perception. It does not want to officially comment on customer relationships and ongoing contract negotiations. Nevertheless, it gives the impression that it is also on the right track in this area.
The "Chief Restructuring Officer" demanded by the financiers had already been sold as a success. "With this decision, the Supervisory Board is reaffirming its confidence in the Management Board," it said regarding the introduction of the restructurer Hengstmann. His appointment is "a clear mandate to consistently continue the successful course we have embarked upon".
Ex-officials of the Free State of Bavaria as PR consultants to MFAG
Anyone reading MFAG's press releases sometimes thinks they are watching the wrong movie. After the SZ and other media reported on the financial hole and restructuring reports, the company clarified in a political letter in March "why there can be no talk of 'rescue', but rather of 'prospects'". They are good. And: "Our motto in this issue is also: We are flying on transparency".
Three months later, Saxony's finance minister's submission to the cabinet meeting speaks of "an economically difficult situation that threatens the existence of the company". Without the help of the syndicate banks, the regular continued operation of both airports was "acutely endangered. An insolvency that could not be ruled out would have incalculable consequences".
The far more optimistic newsletter is aimed at decision-makers in business and politics - not least those who are to decide on the three-digit million aid. The political newsletter is produced by Wolffberg Management Communication GmbH, based in Leipzig. An explosive fact: its boss Peter Zimmermann was government spokesman in Saxony from 2007 to 2009. At his side: Co-Managing Director Sandra Schneider, deputy government spokesperson for five years. As spokesperson for the Minister of Finance, she had already responded sparingly to press inquiries about the airports until the end of 2021.
No reaction to controversial consultancy contracts
The agency is on a list of consultants requested by the Supervisory Board in 2021 for the years 2019 to 2021, with a total volume of almost 7.9 million euros. According to SZ information, they were never discussed, let alone that there were any consequences. Nevertheless, well over half of the 51 posts were awarded through official channels: as a "free award", due to "long-standing cooperation", "after a market research" or "based on a recommendation". Observers question the usefulness of many of the contracts. Saxony's Ministry of Finance does not wish to comment on the deals, citing confidentiality.
The MFAG sees no contradiction in these statements. "The Minister Presidents of Saxony and Saxony-Anhalt have addressed a 'situation that threatens the existence of the company', which has been known for years," it said in response to an inquiry. MFAG has been making annual losses in the double-digit millions since 2000. In 2022, the company generated a negative result of 36.5 million euros on a turnover of 171 million euros. In 2023, according to SZ information, it is even expected to be a few million more.
Nevertheless, the group of companies points out that it has "consistently reported operating profits for the last ten years and to date". Income is already above pre-crisis levels - thanks to targeted measures, particularly in the "non-aviation sector", i.e. retail, catering, parking and advertising. The company wants to "also reach the profit zone in terms of earnings before taxes by the end of the decade": through further growth. There is great potential "in the areas of logistics and space development as well as in moderate growth in passenger numbers".
Dreariness in the terminal - despite the summer vacations
The airport in Dresden-Klotzsche did not record 930,000 passengers last year - less than 31 years ago. Although there was an increase of ten percent compared to the previous coronavirus year, this was only half the national average. Leipzig-Halle increased by 35 percent to 2.1 million passengers. Is this the result of one-sided marketing and sales at the expense of the state capital, as some are suggesting?
The management denies this and speaks of extensive efforts to market "Dresden International", establish new routes and attract passengers in the border region of Poland and the Czech Republic. The activities include "up to 100 meetings per year at trade fairs alone". There is continuous contact with all relevant airlines, online marketing based on Lufthansa customer data and more than 15 accompanied roadshows in neighboring countries.
The success is manageable. Following the loss of the routes to Amsterdam and London, "Dresden International" now only has one city connection abroad, Zurich. In the announcement of the summer offer, Sundair from Stralsund is celebrated as the "number one vacation airline from Dresden" with seven destinations. Despite the current summer vacation, the terminal is a dreary place. After more and more airlines have said goodbye to Dresden in recent years, more than two days fit into the 32 lines of the departure board.
DRS brings up the rear in Germany in terms of available seats
There is provocative talk of a "ghost airport" - partly because its management is based in Leipzig. And even there is a team that is not based in Saxony and commutes to the West or Berlin. Until the 2000s, even middle management was required to take up their main residence in the region within six months. A Group spokeswoman counters questions by listing bosses at other airports who also did not live in the same place of work. The difference: things are much better there.
The forecasts do not bode well. The Federal Association of the German Air Transport Industry puts Dresden's seat capacity in the second half of the year at 300,000, putting DRS at the bottom of the 18 airports listed and Leipzig-Halle only two places better with 600,000.
The day after the MFAG Supervisory Board meeting, the business association "Die Familienunternehmer" launches a poster campaign for the state elections with the slogan: "No journey into the blue. Saxony's economy needs confidence". The companies want to promote political stability, they say - "where as many people as possible can see it: At the airports in Leipzig and Dresden". A good choice?
