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Stock exchange head supports airBaltic share listing

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Daiga Auzina-Melalksne

The idea of listing the Latvian airline airBaltic’s shares on the stock exchange is correct, emphasizes Daiga Auzina-Melalksne, chairwoman of NASDAQ OMX Riga board.

She reminds that throughout the world airlines mainly list their shares on stock exchanges. As examples, she mentions SAS, Finnair, Lufthansa, British Airways, KLM and Ryanair.

According to Auzina-Melalksne, airlines are suited for stock exchanges, as they have great reputation and the industry keeps expanding. Also, airlines are mostly large and important companies. Thus, airBaltic would be ideal for stock exchange.

However, the stock exchange head says there are several prerequisites for airBaltic’s successful position on the stock exchange.

Firstly, the company’s corporate governance has to be arranged. Namely, getting rid of the shareholders’ agreement and unnecessary business intermediaries.

Secondly, a clear and transparent airBaltic management structure has to be established, appointing responsible and professional council, instead of a political one. It is also necessary to extend the company’s board, which until now consisted of only one board member. The board also have to have only professionals.

As a third precondition for listing airBaltic shares on the stock exchange, Auzina-Melalksne mentions the availability of information on the company’s finances. «For example, airBaltic competitors who are listed on the stock exchange are all regularly publishing their financial statements, currently reporting a profit. For example, SAS, Ryanair and EasyJet are operating with profit. While a detailed justification is provided in case of losses,» the stock exchange head says.

«I think that until airBaltic starts listing shares, it has to purposefully use the time to improve reputation not only in the eyes of its clients and future investors, but also in terms of the entire population of Latvia, some of which will certainly be airBaltic shareholders as soon as it starts stock flotation,» Auzina-Melalksne says.

As reported, the national airline airBaltic’s shares might be listed on the stock exchange already in 2014, informed Anrijs Matiss, State Secretary at the Transport Ministry.

According to him, the state should not have to deal with aviation matters, so after the financial situation stabilizes, strategic investor will be attracted to the airline to expand its destinations and fleet. Currently, it is planned that airline’s stock flotation could start in 2014.

The government reached a decision on airBaltic future management at a close meeting on Tuesday, September 27. It stipulates investments of 57.6 million lats in the national airline, if its minority shareholders fulfill the conditions, the Prime Minister Valdis Dombrovskis revealed to journalists.

airBaltic shareholders’ meeting is set to take place today, September 29, during which decisions on the company’s share capital increase, the election of new board and council, as well as change in the statutes is likely to be adopted.

The Transport Minister Uldis Augulis explained that the Ministry has already prepared documents so that a new board and council can be appointed at the shareholders’ meeting. However, negotiations between the shareholders on the necessary decision adoption have not yet concluded.


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