The Latvian government has invested €250mn equity in airBaltic, the flag carrier in which Riga holds a majority stake, to help it overcome the crisis caused by nose-diving passenger numbers during the coronavirus (COVID-19) lockdown, airBaltic said on May 7.

Following the investment, the Latvian state now has a 91% stake in the airline, an increase from the 80.95% it had held prior to the investment.

airBaltic has suffered from the Europe-wide lockdown on travel that governments imposed in February and March to curb the spread of the coronavirus. 

The equity investment, which remains subject to the approval of the European Commission, will be provided to airBaltic in tranches. 

“Each investment tranche will be provided in line with market rules and will not exceed the losses caused as a result of the COVID-19 crisis,” airBaltic said in a statement.

The company said the investment would facilitate carrying out its strategy of adapting to the post-pandemic environment. The strategy “focuses on a new start for airBaltic once international flights resume. This will facilitate successful growth for the company once the impact of the COVID-19 crisis begins to ease,” the company’s CEO Martin Gauss said in a statement.

The new plan foresees a reduced fleet for the upcoming years, initially resuming operations with 22 Airbus A220-300 aircraft. The new plan takes into account the reduced capacity for the years 2020 and 2021, while at the same time foresees a return to growth with up to 50 Airbus A220-300 aircraft by the end of 2023, the company said.

The plan is a new iteration of a strategy adopted in 2018 that called for the expansion of routes from all three Baltic countries, Latvia, Estonia and Lithuania, to cover the main European hubs. The strategy also foresaw the airline achieving a “significant increase in passenger numbers and its revenue by 2025.”