This year will be decisive for Latvian national airline airBaltic. An investor will need to be found in the near future, shares will need to be released on the stock market, and the existing loan will need to be refinanced. The company’s council believes – to succeed, state funding will be necessary again, as reported by TV3 programme “Nekā personīga”.
The company promises – profits will come once the airline’s fleet is bigger. This kind of business plan and promises have been circulating at least since 2019, only the number of aircraft needed keeps increasing all the time. There is no Plan B. The engines of the new aircraft, it turns out, need more frequent maintenance and those that fly are more profitable to lease to other airlines than to serve passengers.
“Nekā personīga” reminds that in 2019, airBaltic released bonds and borrowed EUR 200 million from the stock exchange. However, the [Covid-19] pandemic put a stop to all flights. airBaltic was forced to lay off 700 employees. Like other airlines in Europe, airBaltic received aid from the state – EUR 250 million.
The airline promised to return the money to the state after selling shares on the stock market.
At that time, there were 22 Airbus aircraft in the fleet, but the business plan envisaged increasing the number to 50. It was decided to discontinue the use of the old Bertolt Flick-era turbo-propeller, even though there was still EUR 100 million in leasing left to pay for them.
“Nekā personīga” notes that airBaltic has 49 Canadian Airbus aircraft. The 50th is scheduled to arrive in the coming weeks. One of the aircraft in question has been grounded since May 2024. Another five remain parked since summer, and a couple of others have not seen the sky since autumn.
According to data from Flightradar24 database, at least three more aircraft remain idle since the end of the year. The Chief of airBaltic confirms this and admits the number of grounded aircraft is even larger.
As the programme was told by CEO of airBaltic Martin Gauss, “the number changes, but yes, we currently have 16 planes on the ground for a variety of reasons. But it’s this week, it changes every week, because if the engine comes in, we install it, and the plane comes back into service. Now it’s planned because our winter schedule has been reduced. If we had more planes right now, these planes would fly to other airlines with full service leases, but we couldn’t make that money because we don’t have engines.”
Currently, nine aircraft with the entire airBaltic crew fly on Lufthansa flights. The number of aircraft leased in the summer will increase to 21. With the exception of the parked planes, airBaltic itself will have around 20 aircraft – a smaller fleet than what they had before the ambitious business plans were put forward.
The programme indicates that no one officially confirms this, but unofficially everyone knows that talks are underway with Lufthansa about investments in the Latvian company. This is beneficial for a German company because it wants to continue leasing airBaltic planes.
This is important for Latvia, as it will show other investors that despite not too shiny financial indicators, airBaltic is safe to invest in. A year ago, the government gave the green light to the deal, now waiting for a response from Lufthansa.