The management board of Latvian national airBaltic airline has made a voluntary decision to temporarily lower their wages by 40%. This measure will remain in force until the initial public offering (IPO) of the airline’s shares has been successfully completed, as confirmed by airBaltic representatives.
The Board of airBaltic includes CEO Martin Gauss, who serves as the Chairman of the Board, Director of Finance Vitolds Jakovļevs and Director of Operational Management Pauls Cālītis.
Income declarations of public officials show that in 2023, Gauss was paid EUR 828 942 as Chairman of the Board of airBaltic, Jakovļevs was paid EUR 339 310 as a member of the Board of airBaltic and Cālītis was paid EUR 314 204.
The airline points out that the IPO is one of airBaltic’s strategic priority objectives, which is intended to strengthen the company’s financial sustainability and ensure further growth, as well as the voluntary wage reduction reflects the board’s belief in the long-term value of airBaltic.
Andrejs Martinovs, Chairman of the Council of airBaltic, adds that this decision clearly demonstrates the Board’s confidence in the future of the airline and its determination to ensure a successful IPO.
“Their leadership is crucial for us to successfully move forward with this important milestone in the development of airBaltic. The Council of the airline fully supports this initiative and will continue to ensure a successful transformation, with airBaltic becoming a listed company,” adds Martinovs.
The goal of airBaltic is to strengthen its position as the leading airline in the Baltic region and one of the fastest growing airlines in Europe. At the same time, the company monitors the development of the capital market and the global aviation industry to ensure that the IPO is launched at the optimal time to promote the greatest possible value.
LETA previously reported that Martinovs, Chairman of the Board of the asset management company INVL Asset Management, has been appointed as the Chairman of the Interim Council of airBaltic, and Lars Midlands, Member of the Council of the Swedish airport operator Swedavia, has been appointed as the Member of the Interim Council. A minority shareholder, Danish businessman Lars Tussen, also retains his seat on the Board.
Also on the 11th of February, the shareholders’ meeting confirmed that airBaltic’s share capital in preparation for the IPO will be reduced by EUR 571.293 million and the share structure of the existing company will be simplified. The rules for reducing the share capital state that the share capital of airBaltic will be reduced to EUR 25.179 million.
It has already been reported that on the 29th of January, an agreement was reached between the Ministry of Transport, airBaltic and the German airline Lufthansa Group, which envisages a EUR 14 million investment by the Lufthansa Group in airBaltic. In exchange for the investment, Lufthansa Group will receive a convertible share, which will give it a 10% stake, as well as a seat on the board of airBaltic to the investor. Later, after a potential airBaltic IPO, this convertible share will be converted into ordinary shares.
After the IPO, the size of the Lufthansa Group’s participation will be determined by the potential IPO market price. The transaction also provides that Lufthansa Group will hold no less than 5% of airBaltic’s capital after the potential IPO.
This deal still requires permission from the German Federal Cartel Bureau (Bundeskartellamt).
On the 30th of August, 2024, the Latvian government agreed that the state must retain at least 25% plus one share in the company’s capital after the airBaltic IPO.
airBaltic carried a total of 5.2 million passengers in 2024, up 13% from the year before, and performed 47 000 flights, which is 7% more than a year before.
In 2023, airBaltic’s audited turnover was EUR 664.289 million, which is an increase of 33.2% compared to 2022, and the company made a profit of EUR 33.852 million as opposed to losses a year earlier.
Until the registration of upcoming changes, the Latvian State shall retain ownership over 97.97% of the shares of airBaltic, while the financial investor, the Danish entrepreneur Lars Tussen’s owned Aircraft Leasing 1 shall retain ownership over 2.03% of shares.