On Monday, the 6th of January, parties of the ruling coalition in Latvia failed to decide on the replacement of the CEO of airBaltic Martin Gauss. Instead the government decided to wait for decisions from shareholder meetings.
After the meeting of the coalition, Prime Minister Evika Siliņa mentioned it is clear the airline is important to the state – it needs to provide transportation services to residents and do it well. “Unfortunately, the decision to cancel flights this year was not explained in full to us,” said Siliņa, adding that this announcement initially caused confusion within Latvian society.
The Latvian PM said the coalition trusts that on the shareholders meeting scheduled for the 21st of January the existing management of the airline will be properly evaluated.
Siliņa added that airBaltic generally works well and this work should continue.
At the same time, Siliņa criticised the airline’s communication regarding the cancellation of flights. She stressed that the cancellations and rescheduling will not affect as many residents as they initially thought. She stressed that flights are cancelled from time to time by various airlines.
“Such an announcement should have come in a more appropriate and comprehensible form,” said the PM, commenting on the cancelled airBaltic flights.
Latvian Minister of Transport Kaspars Briškens told the media that the airline’s management is expected to provide specific results. If no result is accomplished, then the company’s council will have to present alternative plans.
Briškens noted that at the shareholders meeting scheduled for the 21st of January it is planned to discuss the “failed communication” in regards to the cancellation of flights. He agreed with the PM’s voiced criticisms in regards to the airline’s failed communication, which caused agitation among the residents who had booked flights in advance.
“It is clear they could have communicated that better,” added the minister.
Minister of Economics Viktors Valainis told journalists that airBaltic is strategically important to the state. This is why it is necessary to act to make sure this company is as successful as possible.
“To ensure this, we need professional management that is prepared to face existing challenges,” added Valainis.
At the same time, Valainis said his position has not changed in the topic concerning Martin Gauss.
It was previously reported, the biggest objections to the management of airBaltic were expressed by the Union of Greens and Farmers (ZZS), which is part of the coalition. On the 3rd of January, this political party discussed issues related to airBaltic at the party’s board meeting, and Armands Krauze, chairman of the board of ZZS, then told LETA that Martins Gauss, chairman of the board of airBaltic, has effectively lost the trust of ZZS and therefore should not remain in charge of the company.
At the airBaltic shareholders meeting on the 21st of January, it is planned to evaluate the work done by the airline’s council, according to the entry on social networks posted by Minister of Transport Kaspars Briškens.
The minister stressed that airBaltic is a strategically important state company that contributes to both the aviation sector and Latvia’s entire economy. For the company to continue growing, the government has promised attracting an additional amount of EUR 300 million for the implementation of the private capital business plan.
“Promises should be kept and there should always be a Plan B in the event of the situation suddenly changing. We evaluate the work done by the council and, especially, its chairman Klāvs Vasks based on results, correct and timely communication, as well as ability to manage the company in challenging times,” Briškens wrote.
In the first days of 2025, airBaltic announced the cancellation of 4 670 flights on 19 routes this summer season due to delays with aircraft engine maintenance done by engine manufacturer “Pratt & Whitney”.
During the summer season, the airline will cancel flights on 10 routes from Riga – to Aberdeen, Belgrade, Cluj-Napoca, Yerevan, Gothenburg, Mykonos, Pristina, Rzeszów, Skopje and Stavanger. From Tallinn, on the other hand, airBaltic will no longer service flights to Dubrovnik and Hamburg. Operating from Vilnius, airBaltic will no longer fly to Dubrovnik, Ibiza, Roda, Kishinev, Tel Aviv and Valencia.
After this announcement from airBaltic, the minister said he has ordered the airline’s council to immediately explain the reasons behind the cancellation of flights and its possible impact on Latvia’s international connectivity.
Martin Gauss told LETA the situation that has appeared in society and in the public environment following airBaltic’s announcement of the cancellation of almost 5 000 flights has been disproportionately exaggerated for political reasons, and the airline Plan A is to make an initial public offering (IPO) of shares this year and achieve results so that no additional investment from the state is required.
On the 30th of August 2024, the Latvian government agreed at a closed meeting to lower airBaltic capital by EUR 571.293 million prior to the initial public offering and that the company’s share structure will be simplified. However, data from Firmas.lv shows no changes have been implemented so far.
It was also decided at the closed government meeting that the Latvian state is to retain at least 25% plus one capital share in airBaltic after the initial public offering.
Briškens previously explained that the sale of the controlling package is not a topic that is being discussed in negotiations with airBaltic’s strategic investor.
According to unofficial information, German Lufthansa may be the strategic investor in question. This airline may acquire approximately 10% of shares in the initial offering.
airBaltic carried a total of 4.536 million passengers in 2023, an increase of 35.7% compared to 2022, and 44 100 flights, an increase of 18.3% compared to 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. The company made a profit of EUR 33.852 million as opposed to losses a year earlier.
The Latvian state owns 97.97% of airBaltic shares, while financial investor, Danish entrepreneur Lars Tussen’s Aircraft Leasing 1 owns 2.03%.