Latvian Minister of Defence Kaspars Briškens will not give airBaltic’s new council any hints or orders to replace the airline’s CEO Martin Gauss, the minister told LTV.
When asked if he or the ministry have any intentions to suggest the replacement of Martin Gauss once a new council has been elected, the minister said no. He promised – as long as he remains minister, he will adhere strictly to the principles of good governance, preventing this kind of direct political interference in the operational activities of the company, in the evaluation, adoption or removal of board members.
“This is why we have the Commercial Law, and any good management standard states this is the direct responsibility of the council, and it is the council’s duty to evaluate [the board],” notes Briškens.
When asked what might happen if it becomes necessary for the state to invest more money into the airline and the new airBaltic Council decides to keep Gauss as the airline’s CEO but the Union of Greens and Farmers (ZZS) objects to additional investments, Briškens said he will continue working with all colleagues from the coalition. He will respect the party’s political position. Nevertheless, he has told government partners that he will not breach good management principles.
The minister said he hopes it will be possible to convince partners to focus on efforts to find a strategic investor.
“The new council will have every privilege to evaluate the work of the existing board, make conclusions and, if need be, make decisions. But these decisions will not be made by the Minister of Transport or other minister,” said Briškens.
As previously reported, the Ministry of Transport and airBaltic Council have agreed to dissolve the airline’s existing council. Members will remain in their respective posts and continue performing their duties until the 11th of February.
At the beginning of 2025, airBaltic announced the cancellation of flights on 19 routes this summer season. The reason is delays with aircraft engine maintenance performed by Pratt & Whitney. A total of 4 670 flights have been cancelled.
As previously reported, at the meeting of airBaltic shareholders this Tuesday, it was decided to dissolve the airline’s existing council on the 11th of February. Once all of this is done, it will be possible to attract a strategic investor for airBaltic. According to unofficial information, it is Germany’s national airline Lufthansa.
State Secretary to the Ministry of Transport Andulis Židkovs explained that even though the existing council members will be removed from their posts, minority shareholder Lars Thuesen is in a different situation. He is bound by the shareholder agreement. “He [Thuesen] will remain on the council regardless of representatives of the state appointed there. His place on the council is guaranteed as an existing shareholder,” added Židkovs.
Briškens claims the agreement for the replacement of airBaltic council will not affect the efforts to find a strategic investor.
The minister said negotiations continue, adding there are still certain documents the two sides have to coordinate and sign, as well as solve certain technical issues before a deal can be made.
On the 30th of August 2024, the Latvian government agreed at a closed meeting that the Latvian state should retain at least 25% plus one share in airBaltic after the initial public offering (IPO).
Briškens previously explained that negotiations with airBaltic’s potential strategic investors do not touch on the topic of sale of a controlling package of shares, rather the sale of a minority package before IPO, going into IPO, as well as the option to opt into IPO.
According to unofficial information, the potential strategic investor in question may be Lufthansa, which may acquire approximately 10% of shares in the initial deal.
airBaltic carried a total of 5.2 million passengers in 2024, up 13% from the year before, and 47,000 flights, up 7% from the year before.
The audited turnover of airBaltic in 2023 was EUR 664.289 million, which is an increase of 33.2% compared to 2022, as well as the company made a profit of EUR 33.852 million as opposed to losses a year earlier.Latvian state owns 97.97% of shares in airBaltic. Aircraft Leasing 1, which is owned by financial investor, Danish businessman Lars Thuesen, owns 2.03% of shares.