Campaign Spending: An Entrepreneur on Why airBaltic Will Survive Until October 0 11

I ask, don’t the members of the Saeima, who will decide on another 30 million on April 14, understand that the company cannot be saved? That in three years, they will need to return 380 million, plus 165 million in interest over three years, and there will be nowhere to get it from, the budget won’t gather that much.

• What are you talking about? What three years! They have elections in October, half of them will be ousted, and they are thinking only about one thing: how to stay in power? Air Baltic is a source of pride for the average voter. Lithuania doesn’t have it, Estonia doesn’t have it, but we do! If the company sinks before the elections, they won’t be forgiven. Therefore, they will inject as much as is asked, just to be re-elected. Consider it campaign spending. And after the elections – they can think, but it will be a different Saeima thinking. Everyone will blame the previous one – Karins, Mierins, and others.

• Can’t we just give it to Lufthansa for nothing now? Externally, everything will remain as it was, the green tails, the same planes?

• It’s a big question whether they will take it. And whether they can, in negotiations Lufthansa wanted more, about 25%, but European antitrust authorities wouldn’t allow it – you already have too much, you’ve already acquired Swiss, Austrian, and Brussels. And what is there to take anyway? They have nothing of their own, an office on lease, planes on lease, the only asset – the training center, which is mortgaged under bonds.

Right now, all airlines are not in the best position. Fuel prices have indeed skyrocketed. Aviation is a very costly and low-profit industry. Before taking on such a burden as AirBaltic, one must think very carefully.

Such leasing is of no use to anyone, it is very expensive. Do you think that’s why Gauss chose the Canadian Bombardier? They are the only ones who agreed to his devised tricky leasing scheme – the planes seem to be at a relatively low price, but the leasing is expensive, and goes through intermediaries, provided by Lars Tuessen, a minority shareholder with 1.6% in Air Baltic. Gauss was fired, but the scheme continues to work, and he is still in it, managing.

Trump started to pressure Canada during his first term, in North America, there is very strict regulation of the aviation industry, the scheme became hard to maintain. The Canadians quickly sold Bombardier to Airbus, now the planes are no longer CS300, but A220-300. In Europe, regulation is much more relaxed, anyone can fly however they want. You can lease several planes, get a license for an airline, sell tickets a year in advance, then bankrupt the company and relax in the Caribbean. AirBaltic also credits itself with its cherry prices in advance. Now they haven’t paid anyone for fuel for a month and a half.

• And how do they sell?
• On credit, they will receive money from the government – they will pay off.
• But if AirBaltic leaves, will their flights be taken over by other companies?
• Hard to say. SAS is already anticipating, increasing the number of flights to Copenhagen, three daily instead of two. The Poles, LOT, are very aggressive.