The Ministry of Transport proposes to allow the national airline airBaltic to increase its total personnel costs this year by 18% compared to 2024, according to a draft order published by the ministry on the legal acts portal.
As explained by the ministry, the 18% increase in personnel costs is related to the expansion of airBaltic's operations, preparations for the planned fleet increase in 2026, and the need to ensure competitive wages for certified aviation specialists.
According to the law, personnel expenses can be increased by no more than 2.6% compared to the previous year unless the Cabinet of Ministers makes a separate decision.
The ministry believes that adhering to such a limitation would effectively halt the development of airBaltic.
The annotation to the draft order notes that the increase in the number of airBaltic employees is associated with fleet expansion and increased activity. Each new aircraft requires new crews—about ten pilots and 20 flight attendants, the training for which takes up to 18 months. Additionally, airBaltic operates in a free market, competing with other regional carriers that are actively attracting employees from Latvia. If the restrictions on personnel cost growth are maintained, airBaltic will lose competitiveness in the labor market, which will directly affect the regularity of flights and the quality of services.
As noted by the Ministry of Transport, the cancellation or amendment of the legally established limitation for airBaltic will not have a direct impact on state budget expenditures in 2025.
As reported, airBaltic's turnover for the first nine months of this year amounted to €594.303 million, with a profit of €4.249 million.
In 2024, the airBaltic group reported audited losses of €118.159 million compared to a profit the previous year, while the group's turnover increased by 11.9% to €747.572 million.
In August of this year, the German airline Lufthansa became a shareholder of airBaltic. Currently, the state owns 88.37% of airBaltic shares, Lufthansa holds 10%, financial investor Lars Tuessen through Aircraft Leasing 1 owns 1.62%, and other shareholders hold 0.01%. The company's equity capital is €41.819 million.
Leave a comment