Latvia’s national airline airBaltic has entered a new phase under freshly appointed chief executive Erno Hilden, a Finnish aviation executive with more than 25 years of industry experience. During his time as chief financial officer at SAS Scandinavian Airlines, airBaltic was among the carriers from which SAS leased aircraft.

As reported by bne IntelliNews, the former CEO, Martin Gauss, was sacked last April, following the €24mn loss in 2024.

After spending his first weeks meeting staff and reviewing operations across the group, Hilden concluded that the airline’s reputation outweighs the size of its home market.

 “I would say airBaltic is a company that punches well above its weight in the aviation industry,” he said in an interview with Latvian Television.

In the short term, the airline will continue to balance scheduled passenger services with aircraft leasing to other carriers, a model designed to soften the impact of seasonal demand swings. 

“Frankly, right now this is the best possible positioning for airBaltic,” Hilden says, pointing to plans for an almost even split between the two activities next summer, Latvian Television said.

On fleet strategy, the new CEO has ruled out diversification beyond the Airbus A220-300.

“For airBaltic, a single-type fleet brings many advantages, such as lower costs and simplified maintenance,” he says, arguing that operational efficiency outweighs the flexibility of introducing smaller aircraft, Latvian Television reported.

Despite strong brand recognition, Hilden is candid about the airline’s financial strain. Recent engine availability issues and weaker economic conditions in the Baltics have weighed on results, prompting discussions over recapitalisation. 

“You cannot go on producing poor results indefinitely and expect someone to be interested in investing in you,” he says. “To achieve financial sustainability and stability, we need to improve the company’s financial performance,” he said, Latvian Television reported.

The prospect of an initial public offering remains on the table, but Hilden stresses that execution comes first. “An IPO remains one of the main scenarios for recapitalising the company,” he says, noting that market conditions must also align, Latvian Television reported.