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Saturday 24.03.2018 | Name days: Kazimirs, Izidors

airBaltic’s litigations make investor attraction difficult

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUThree years have passed since the acquisition of 47.2% of airBaltic shares from Baltic Aviation Systems by the state of Latvia.

The airline’s current management publicly admits its pride over last year’s revenue and plans to earn at least EUR 9 million this year. In reality, however, the current situation is not as wonderful as they would have everyone believe – litigations airBaltic is involved in have made it very difficult for the airline to develop, as reported by Latvijas Radio.

Transport Ministry’s State Secretary Kaspars Ozoliņš admits the negative impact of litigations on the airline. According to him, it has not been possible to prevent the loss of approximately EUR 180 million from airBaltic’s budget over the past three years.

Chairman of Riga International Airport Andris Liepiņš hopes it will be possible to resolve the matter of increasing base capital within the next couple of months. Vice-President of airBaltic Jānis Vanags blames former shareholders for everything.

However, even if the court cancels Flick’s requested prohibition to increase airBaltic’s base capital, the capitalization of approximately EUR 80 million of state loans would leave airBaltic’s capital negative.

Aviation expert Tālis Linkaits warns that the burden of litigations is a very serious obstacle for the attraction of investors. The attraction of strategic investors is the only option at the moment that can secure development for the airline and restore airBaltic’s fleet, notes Linkaits.

In addition to that, according to Liepiņš, airBaltic has limited ability to expand the network of destinations without an investor.

According to estimates – in order to expand to the Near East, it is first necessary to invest five to six million euros. The ‘conquering’ of the Chinese market would require at least ten million euros.

Experts are very cautious about airBaltic’s chances to find a strategic investor. CEO of Prudentia Kārlis Krastiņš had mentioned in his interview to Latvijas Radio some time ago that aviation in Europe had been in a difficult situation and that the Russian-Ukrainian conflict had negatively impacted tourism and business ties. It is also important to keep in mind the situation within the airline – legal risks and litigations.

Latvian Transport Ministry’s State Secretary Kaspars Ozoliņš is very optimistic: «Yes, this is not the best moment, but I believe it is right to work on this matter individually.»

The hope to find a strategic investor is increased by the fact that airBaltic managed to conclude 2013 with profits in spite of suffering losses of EUR 121 million in 2011 and EUR 27 million in 2012. Vanags denied any talks that airBaltic’s success is entirely at the expense of Riga International Airport.


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  1. Ilmars says:

    Air Baltic is an insolvent company that should have been shut down years ago. According to Ozolins , another 180 million euro of taxpayers money has been lost since the Latvian state acquired its 47.2% stake 3 years ago.
    Short term debt alone is greater than the total turnover of the airline.
    If the current management say that they are profitable then they are a pack of liars. They dont count accumulated losses and these are going to get a whole lot worse.
    AB should be shut down immediately and the Ozolins should be sacked .
    No one is going to be silly enough to buy a bankrupt company.

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