By Jann Bettinga and Aaron Kirchfeld
Jan. 23 (Bloomberg) -- Warren Buffett’s bid to buy a landing strip within earshot of Germany’s busiest airport, challenging national carrier Deutsche Lufthansa AG on its home turf, is meeting resistance from local residents.
The mayor of Egelsbach, a commuter town south of the country’s banking capital and 10 kilometers (6.2 miles) from Frankfurt Airport, is scheduled to meet executives from Buffett’s business-jet venture NetJets Inc. today to consider a 3.7 million-euro ($4.8 million) offer for the unprofitable airfield. Egelsbach is the only shareholder that hasn’t agreed to sell to the U.S. billionaire, who wants to expand the facility and win more private jet clients in Germany.
“It’ll be a hard fight, like David versus Goliath, but I don’t think we’re going to sell,” said Harald Esser, a local politician who lives a few hundred meters from the airport. “The noise and pollution would make the town unlivable.”
The 10,000-strong community of Egelsbach, which controls 11 percent of the airport, wants more time to examine the proposal, mayor Rudi Moritz said by telephone. Residents have formed a protest group against the expansion, planning street demonstrations to block the sale.
Jets serving Egelsbach fly within meters of Esser’s house, once coming so close that his 6-year-old child playing in the garden began screaming uncontrollably from the shock, he said.
Woodbridge, New Jersey-based NetJets, which offers corporate-jet travel across Europe, has pledged to invest at least 30 million euros to lengthen the airport’s 1,400-meter (4,593 feet) runway by about 270 meters and install equipment that will allow planes to make instrument-guided landings in bad weather, airport spokesman Roland Sorger said. The U.S. company has agreed to increase the number of take-offs and landings to no more than 100,000 a year, compared with about 80,000 in 2008, he said.
The other shareholders -- the city of Offenbach, the town of Langen and local municipalities -- are willing to sell. Egelsbach will give its decision by Jan. 28. A sale requires the agreement of each stakeholder.
The airport’s owners had to inject 500,000 euros to keep the facility operating in 2008. They have declined to spend another 500,000 euros, the sum needed to keep the airport afloat this year, leaving it facing possible bankruptcy if a sale fails, according to Moritz and Sorger.
“The entry of private investors would be an ideal way to maintain the airport as a prime location for business flights and to develop it further,” Egelsbach airport said in a statement in November, when it first discussed a sale.
Buffett’s offer comes after Frankfurt-based Lufthansa, Europe’s second-biggest airline, ended a corporate-aircraft partnership with NetJets early last year. Lufthansa, which has its main hub at Frankfurt’s international airport, opted to buy private jets to offer services on its own. Now, NetJets wants to buy Egelsbach to gain a foothold in central Europe, said Moritz.
NetJets declined to comment, the company’s London-based press department said by e-mail. The U.S. firm sells time shares in corporate aircraft under a system known as fractional ownership.
“Can Buffett make Egelsbach airport profitable in Germany’s stagnating aviation market? I highly doubt it,” said Dieter Faulenbach Da Costa, an appraiser hired by the town of Egelsbach to evaluate a sale who has also worked as a planner for airports in Frankfurt, Tokyo and New York. “Banks are dealing with other problems right now than affording such a luxury” of private jets.
The airfield employs about 400 people and is home to more than 200 airplanes. Corporate travel makes up roughly half of the airport’s traffic, thanks in part to its proximity to Frankfurt, home of Deutsche Bank AG and the European Central Bank, and Frankfurt airport, Germany’s busiest. Executives often use private jets to travel to cities infrequently serviced by major airlines or to avoid lengthy stopovers.
The airport was built in the early 1950s after being originally used as a competition site for model airplanes and then later for glider and propeller planes, according to the airport’s Web site. By 1956, the airport had recorded 37,000 takeoffs and landings on the grass runway. Traffic more than doubled by the 1960s with the addition of a paved landing strip and airport halls.Related Links
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