LV: Government seeks investors for airBaltic national carrier.

By bne IntelliNews August 28, 2012
In the European and British issues of the Financial Times, Latvian government published a call for investors to apply for purchasing a stake in the troubled national air carrier airBaltic by November 1 2012. Up to 50% minus one share is for sale. Communication Ministry commented that Prudentia consultant that was hired by the government to seek for strategic investors is responsible for the publication. Losses of airBaltic in H1/12 were LVL 23mn (EUR 32.7mn), CEO of the company Martin Gauss told the press recently. Companys revenues in H1/12 amounted to LVL 104.7mn, number of flights went down by 15% y/y and passenger turnover down by 11% y/y. Overall this year company plans to cut the losses from LVL 83.2mn seen in 2011 to LVL 33mn. As reported, troubled national air carrier airBaltic could start running with profits in 2015, Minister of Transportation Aivis Ronis told the press after a government's meeting dedicated to the company last month. Current business plans sees the company avoiding losses in 2014 already. To remind, in the end of 2011 47.2% airBaltic shares held by BAS were bought by the Transport and Communication Ministry, thus bringing the state's share in the company to 99.8%. As reported in H2/11, the conflict between the CEO of airBaltic Bertold Flik and the government ended with the resignation of Flik and appointment of Martin Gauss, a former CEO of Hungarian airline Malev. Flik was working as airBaltics CEO since 2002. Fliks resignation was one of the conditions of government-approved austerity package for airBaltic. Government approved increasing the capital of airBaltic by LVL 57.67mn (EUR 82mn), should the private shareholders of the company Baltijas Aviacijas Sistemas comply with governments conditions. BAS was expected to invest LVL 50mn, proportional to its share in the company, to cover operational losses. In the meantime, with the recent crash of Latvijas Krtajbanka which was one of the main creditors of airBaltics, the government doubted BAS's ability to increase airBaltic's capital and took over the airline completely.

Related Articles

EE: Estonian Air records EUR 49.2mn loss in 2012.

Estonian national airline Estonian Air recorded net loss of EUR 49.2mn in 2012, up from net loss of EUR 17.3mn in 2011. Operating loss amounted to EUR 35.8mn in 2012. Revenues of the company ... more

LT: Malsena acquires Latvian flour manufacturer Rigas Dzirnavieks.

Lithuanian flour manufacturer Malsena announced that it has acquired Latvian flour manufacturer Rigas Dzirnavieks. The company indicates that with the acquisition it will become the largest flour ... more

EE: Estonian Air to return excess Embraer airplanes.

Estonian national airline Estonian Air announced that it agreed to pay penalties for returning two excess Embraer E190 aircrafts to the manufacturer. The company has started restructuring and ... more

Notice: Undefined index: subject_id in /var/www/html/application/controllers/IndexController.php on line 335