Ryanair may take stake in Germany's Hahn airport

FRANKFURT (Reuters) - Budget airline Ryanair said on Tuesday it may take a minority stake in Germany's Hahn airport, after Fraport announced it was in talks with the state of Rhineland-Palatinate to sell its 65 percent majority stake.

Deputy Chief Executive Michael Cawley said that while airport holdings was not part of the company's core business, "we would think about it."

German airport operator Fraport said earlier on Tuesday it was holding talks with the Rhineland-Palatinate government about a takeover of its stake in Hahn, after the state prevented it from introducing an extra passenger fee it deemed necessary to render the airport economically viable.

Fraport, also owner of Germany's largest airport in Frankfurt, had planned to introduce an extra fee of 3 euros per passenger in Hahn, prompting Ryanair to threaten to scale back flights there.

Ryanair said on Tuesday it would not go ahead with its threat, as the regional state of Rhineland-Palatinate, which holds a 17.5 percent stake in Hahn, was committed to fending off the planned fees in order to keep Ryanair planes based there.

Fraport had wanted to steer Hahn -- a former U.S. military airfield about 100 kilometres west of Frankfurt -- towards profitability by 2010.

Shares in Fraport were down 3.1 percent at 28.89 euros by 12:20 p.m. British time, underperforming German mid-cap stocks, while shares in Ryanair were up 2.5 percent.

(Reporting by Angelika Gruber, writing by Sarah Marsh; editing by Elaine Hardcastle)