Lithuania would not secure influence by acquiring a small percentage of shares in Latvian national airBaltic airline, aviation experts admit. The head of Lithuanian Airport Operator Company agrees with this.
However, the Vice President of Vilnius Chamber of Commerce, Industry and Crafts is confident it could help increase the number of direct flights to and from Lithuania’s capital city, which would assist in efforts to find investors.
Jonas Butautis, shareholder of Irish aviation group Heston Aviation, told Lithuanian public radio on Friday, the 19th of January, that it would be wrong to believe that acquisition of 5% or 10% of shares would allow the country to influence economic decisions of a foreign airline. “It would be a minority package of shares, management principles of any organisation state that Lithuania would have a minority presence in all shareholder meetings, which is not enough to influence any strategy,” he said.
According to the businessman, Lithuania should not acquire airBaltic shares, the growing demand for air traffic will be met organically, but flights to certain destinations could be subsidized.
“We don’t really need those shares.
I can see what Latvia would gain from us acquiring these shares, but I don’t really see how the acquisition of airBaltic shares would benefit Lithuania,” said Butautis. “Demand for travel will go up, and if we invest in infrastructure in accordance with existing airport plans, I believe airBaltic or other airlines will organically satisfy this demand,” he said.
The head of Lithuanian state company Lietuvos oro uostai, which manages the airport of Vilnius, Kaunas and Palanga, Simonas Bartkus admits it would be difficult for Lithuania to influence decisions as a minority shareholder. However, he expects airBaltic could offer direct flights from Lithuania to far-away destinations in demand.
“With or without shares, I expect their strategy, which they are developing in Riga and Tallinn, and in a lesser sense from Vilnius, would be beneficial to us and we could get more flights,” Bartkus told Lithuania Radio, adding that airBaltic strategy provides a focus on business clients by offering them flights to destinations that are not transport hubs or holiday routes but are still important to various business sectors.
Orijana Mašalė Lithuania Civil Aviation Association said she doubts acquisition of airBaltic could improve Lithuania’s air traffic connections.
“There are definitely more cost-effective ways to do it instead of acquiring airBaltic shares, which would put Lithuania in a minority shareholder position. From a business viewpoint we should not give in to this illusion,” she told Lithuanian Radio.
Taurimas Valys, Vice-president at the Vilnius Chamber of Commerce, Industry & Crafts believes that Lithuania would game more than it would lose from acquiring airBaltic shares, because it would allow the country to increase the number of direct flights operating from Lithuania, which is highly important when it comes to attracting investors.
“If we’re talking about attraction of foreign investments, direct flights are an element that has a direct influence. We lose much without them, we don’t create jobs, and in the eyes of many investors we come off as marginal and provincial,” he explained.
Also read: Lithuania considers acquiring airBaltic shares
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