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Wednesday 17.01.2018 | Name days: Tenis, Dravis
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Bankrupt Lithuanian airline – a threat to Latvian aviation

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On Tuesday May 30 Riga Regional Court will need to decide whether or not the request of flyLAL to arrest the property of Riga airport and airBaltic airline worth 40 million LVL should be fulfilled.

The absurdity of the plea of the bankrupt Lithuanian flyLAL airline against Riga International airport and airBaltic airline could have been a good joke and worth a few laughs if not for one important circumstance – on January 19 2012 Riga City Vidzeme District Court recognized the decision of the Lithuanian Court to be valid. The possibility of Riga Regional Court, being the second authority, recognizing the validity of the December 31 2008 decision of Vilnius Regional Court should not be excluded. If this decision is not challenged further, it would mean that two largest keystones of Latvia’s aviation – Riga International airport and the national airBaltic airline would end up in the hands of Lithuanians, Dienas Bizness writes.

With arrested movable and immovable property, which makes up almost the entirety of Riga airport assets or the financial investments received by airBaltic from the state last year, the Lithuanian side would be well within its rights to dictate the future development of both Riga airport and airBaltic. Additionally, since all the decisions are made by the creditors of the bankrupt flyLAL, the largest of which is the administrator of the insolvent Snoras Bank, all of the cards could end up in his hands.

The decision of the Lithuanian Court was made after the request of flyLAL airline, which mentions that at the time – until 2009 to be exact – Riga airport performed an unjust discount policy in favor of airBaltic, thereby creating unequal competition for Baltic aviation and subsequently for the bankrupt flyLAL, because thanks to 80% large discounts at Riga airport airBaltic was able to commence its activities on the Lithuanian market with ticket prices being significantly lower than those of their Lithuanian competitors. In order to cover the losses, estimated by flyLAL to be 40.7 million LVL, the Lithuanian Court requested to arrest the property of both Riga International airport and airBaltic airline as a form of ensuring any future requests of flyLAL. AirBaltic representatives call the arguments of flyLAL – pure nonsense.

Ref: 102.109.109.1538


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