Latvian state-owned airline airBaltic is definitely worthy of praise and support in keeping air links to all three Baltic States running, Prime Minister Kristen Michal (Reform) has said, though he stopped short of saying this support from Estonia should be financial too.
airBaltic posted losses over EUR 100 million for 2024.
The Latvian government is calling on both Estonia and Lithuania to either invest in airBaltic or contribute to the airline’s functioning in some other way, given the carrier connects to all three Baltic States.
Michal is likely the first Estonian head of government to express gratitude to Latvia for the continued operation of airBaltic. Estonia’s own national carrier, Nordica, was wound up last year.
Speaking at a press conference, Michal said: “To the Latvians, I would say honestly that they deserve major thanks from the Estonian people, since if there’s one airline that works well in our region, it’s airBaltic. We have to be very, very thankful to the Latvians for maintaining it at such quality, and flying from Estonia. The Latvians expect both Estonia and Lithuania to demonstrate political support and interest regarding the future IPO. This does not necessarily mean investing money; it also means positive engagement.”
Latvian Prime Minister Evika Silina and the country’s transport minister Atis Svinka have in various interviews spoken about inviting the other two Baltic States to become shareholders – or at least to enter negotiations. This started just a few days after the abrupt dismissal of Martin Gauss as airBaltic CEO earlier this month.
Prime Minister Silina said: “In our view, this is airBaltic, not Air Latvia. It would be fairer if our Lithuanian and Estonian colleagues spoke to their publics about these possibilities. It could be at government level, airport level, a joint-stock company between countries, institutional cooperation, or even involving a private investor.”
Whether this call represents a new direction for airBaltic’s development or simply a diplomatic plea for help is hard to say. Both Latvian government officials and members of the company’s interim board have confirmed that the business plan from Gauss’ time as CEO is still valid and that raising additional funds via the stock exchange remains a goal.
At the same time, some international experts believe that the sudden dismissal of a CEO – if not swiftly followed up by fundamental changes in the company – does little to enhance a company’s credibility or market value.
Silina said new ideas from the transport ministry were awaited.
She said: “I’m waiting for a vision or plan from the Ministry of Transport that defines the future development directions of airBaltic. How we can strengthen the company’s role in the current market in Latvia and the other Baltic States.”
A planned airBaltic IPO has not yet materialized. This remains on the table as an option, but, according to Svinka, it will not take place this spring due to unfavorable market conditions.
Other members of government both in Estonia and Lithuania remain skeptical about the Latvian calls for joining them in running airBaltic, however.
For instance, while the previous Lithuanian transport minister said his country should consider taking a stake in airBaltic in order to increase direct flights from Vilnius, the current minister, Eugenijus Sabutis, is opposed to this idea on the grounds of not being able to justify to the public giving state aid to another country before resolving road condition issues at home. (ERR)