LV: Preliminary losses of airBaltic at EUR 109.6mn in 2011.

By bne IntelliNews July 16, 2012
Preliminary losses of airBaltic in 2011 were LVL 77mn (EUR 109.6mn), company's newly appointed CEO Martin Graus announced earlier this year. Graus added that company's development plan for 2012-2016 targets LVL 38mn losses in 2011 and making profit by 2014 reaching LVL 14mn by 2016. Another major goal is to consolidate expenses by LVL 330mn by 2016 through fleet optimisation. Passenger aviation market is seen growing 7%, passenger turnover reaching 4mn people annually by 2016. Grauss also added that no additional funding from state will be required this year. At the same time Communication Ministry Anrijs Matiss told the press that government could have to lend LVL 25mn to airBaltic. This could be necessary as ex-minority shareholder of airBaltic Baltijas Aviacijas Sistemas (BAS, controlled by ex-CEO of airBaltic Bertold Flik) did not carry out the capital injection required with all the deadlines passed and the second bankruptcy claim of BAS already submitted to court. 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.

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