Vienna Airport (which owns the majority shareholding at MIA) has lost its Sk11.4bn ($380m) bid for neighbouring Bratislava Airport after the new leftwing Slovak government cancelled the privatisation of the airport.

It is very probable the case will now go to international arbitration and foreign investors were reported as worried about the new government’s promises to roll back its predecessor’s radical economic reforms.

The cancellation of the deal wrecks Vienna’s hope of developing a “twin hub” concept in which the two airports, only 50km apart, were to share business traffic in the region, enabling Vienna to postpone having to build a third runway.

The ruling Smer party had long criticised the sale in February of two-thirds of Bratislava airport, which it regards as strategic. It seized its chance after the anti-monopoly office delayed approving the deal beyond the completion date specified in the sale contract.

Flughafen Wien, Raiffeisen Bank and Penta, a Slovak financial group, won the tender for two-thirds of Bratislava and Kosice airports in February with an enhanced bid which trumped that by Abertis, a Spanish infrastructure company.

Bratislava has experienced a surge in low-cost air traffic since Slovakia joined the EU in 2004.

Critics of Vienna have accused it of wanting to stifle the airport’s growth by raising landing charges to Austrian levels. However, Vienna said it wanted to develop a twin hub concept in which the two airports would share business. Following the government’s decision, VIE’s chairman Herbert Kaufmann promised Vienna would be a tough competitor to Bratislava.