The cabinet of ministers of the Republic of Latvia, the majority shareholder in Latvian airline airBaltic, has approved an investment sum of up to €250 million into the equity of airBaltic in order for the carrier to survive the economic crisis caused by COVID-19.
The Latvian government’s plan, which remains subject to European Commission approval, is to provide its investment to airBaltic in tranches, with each allotment not exceeding the losses caused as a result of the COVID-19 crisis. As a result of such an investment plan, the Latvian state’s shareholding in airBaltic will then increase from the current 80.05 to 91 per cent. Currently, apart from the Latvian state, Danish businessman Lars Thuesen holds around 20 per cent of the airline through his fully owned Aircraft Leasing 1 SIA.
On April 23, the supervisory board of the Latvian airline approved the Riga-based carrier’s latest business plan that envisages a reduced fleet for the upcoming years, initially resuming operations with 22 Airbus A220-300 out of pre-crisis 38-strong multi-type fleet. The new plan takes into account a 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 (formerly the Bombardier CS300) aircraft by the end of 2023. The additional options for 30 Airbus A220-300s remain for future growth.
Martin Gauss, the chief executive of airBaltic, said: “With this new equity investment we can begin to execute our new business plan called Destination 2025 CLEAN, which 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.”
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