Spring could be an appropriate time for Latvian national airline airBaltic to enter the stock market, said CEO of airBaltic Martin Gauss in an interview to LETA.
He explained that there has to be a favourable situation on the market to perform the initial public offering (IPO) and capital increase for airBaltic.
“It wasn’t like that last year and it’s not like it is today. The situation could change in spring, because we can see that changes may come after the inauguration of US President Donald Trump,” said Gauss.
Commenting on the current situation with the strategic investor, Gauss said that this is a shareholder issue in which the Latvian state has already made announcements. “I can only repeat the same thing, that this is to be expected and there is a positive direction going on. The final decision is, of course, a message from both sides – the new shareholder and the Latvian state,” Gauss said.
He mentioned that he hopes to see airBaltic’s investor before IPO. He also said the noise surrounding the situation in airBaltic in Latvia’s public space will not scare away the airline’s potential investors.
“Maybe it is good that this noise is limited to Latvia, but news like that do not inspire confidence in any potential investor,” said Gauss.
Commenting on when the airline’s share capital will be cut, Gauss said all the necessary steps to conduct an IPO will be implemented when shareholders are willing to do so, which is due to the timing of the IPO.
Gauss added that the company is currently focused on the sale campaign, which was set to commence this week. However, the airline will postpone it by a couple of days.
“We still have seven million seats left to sell. This remains unchanged even if we cancel flights. We will now lose a whole week due to negativity,” said Gauss.
He continued by saying that the main emphasis is on IPO in order to ensure growth in the next five years and to double the size of the company, as well as to ensure SpaceX internet connection system Starlink is installed in the airline’s various aircraft this year.
“This year we will focus on better connectivity than last year from the Baltic States. And, of course, we are trying to achieve better profitability. Because last year, when it came to earnings before interest, taxes, depreciation and amortization deductions (EBITDA), everything was fine, but if we look at the net operating result, we are not satisfied with it. This is why we are trying to improve our balance. We hope IPO will help us achieve that,” said Gauss.
LETA previously reported that on Monday, the 6th of January, parties of the ruling coalition in Latvia could not decide if they want to insist on the dismissal of Martin Gauss from his post as CEO of airBaltic. Instead parties decided to wait for decisions from the airline’s shareholder meeting.
Shareholders of airBaltic plan to gather on the 21st of January. There they will decide on the evaluation of the work done by the Council of airBaltic, according to the entry from Minister of Transport Kaspars Briškens on social media networks.
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%.