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Oshlejs: state investments in airBaltic to pay off in less than year

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Janis Oshlejs

The government’s adopted decision on September 27, to invest 57.6 million lats in the national airline AS Air Baltic Corporation’s (airBaltic) share capital will pay off in less than a year, the economist Janis Oshlejs considers.

He points out that the airlinenot only brings to Latvia a significant number of tourists, but also pays a sufficient amount of money in taxes, thus facilitating return on investments.

«The government’s decision was absolutely correct – it is a very good investment,» Oshlejs says.

In his view, neither the sale of airBaltic, nor its reorganization into a new company would be necessary in the long term.

«The company has a very good brand, so it would be simply foolish to replace it. While a private investor would reduce the airline’s activity to maximize revenues – Riga would no longer be the flight hub. Also, the number of jobs would be cut, reducing the amount of taxes paid,» the economist explains.

Oshlejs also indicates that most of the world’s leading airlines have at some point sought legal protection. Many airlines face difficulties and even go bankrupt due to required capital investments and competition. Consequently, airBaltic’s case is nothing unique, so the brand will be able to regain clients’ confidence.

The economist also points out that the new head of airBaltic will have to receive the same salary as Bertolt Flick did, because this post requires top-class professional with a great experience. «Discussions on wages would be inadequate,» Oshlejs adds.

As reported, the government confirmed on Tuesday, September 27, an agreement on airBaltic future management, stipulating it will invest 57.6 million lats in the airline’s share capital.

If airBaltic‘s minority shareholders fulfill the conditions, the Transport Minister Uldis Augulis is to sign such an agreement.

airBaltic shareholders’ meeting is set to take place on September 29. Decisions on share capital increase, new board and council election, as well as changes in the shareholders’ agreement are likely to be adopted during the meeting.


Leave a reply

  1. Ginta says:

    I am an Air Baltic worker and I can state the companie looses at least 3 million a month only for fuel.

  2. zita says:

    I doubt…

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