Currently, there is no urgent need to sell the Latvian national airline airBaltic, as its value will be up in two years’ time, say Girts Rungainis and Karlis Krastins, partners of investment banking company Prudentia.

According to airBaltic business plan, its value will grow significantly by 2014, resulting in bigger interest from the part of investors.

There are more airlines that want to be bought than those that are willing to purchase a carrier. Customers are currently dictating the rules on the aviation market, Rungainis says.

He adds that airBaltic sale is, of course, linked to search for investors and development of the airport.

According to Prudentia, former co-owners and managers of the company are still trying to influence its work in many ways. They are also trying to influence the work of Prudentia as a consultant. They want to speed up the sale, because in short-term the sale would turn out less favourable. This is due to particular interests to recover some funds from the failed business model, Rungainis stresses.

The aggressive airBaltic business model, practiced since early 2009, only boosted losses, because the prevailing trend was to slow down, says Krastins.

“It can be done by a company that has huge financial resources, which airBaltic didn’t. This year’s first six months clearly show that many indicators suggest positive dynamics, compared to a year earlier. This year the company expects significantly lower losses than last year. Besides, airBaltic posted profit in July. According to projections, August will show good performance as well. I think this irritates the company’s enemies and those who lost their money placed in airBaltic.”

It is exactly airBaltic’s foes who want to speed up the sale, which in fact should not be rushed, as the company’s value will soon hit historic heights.

Krastins refrains, however, to name specific numbers, adding that the sales process could take about two years.

He believes that the airline needs to find an investor that is really willing to develop the aviation industry.

As reported, on August 27, the Ministry of Transport published an advert in the EU and British editions of Financial Times, offering potential investors to place bids on airBaltic shares. November 1 was named as the deadline.

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