The airline's management does not rule out that it will turn to the government of Latvia for financial assistance.
The sad financial situation of the national airline was reported this evening by the Latvian TV program Panorama.
"The national airline airBaltic continues to operate in austerity mode. Currently, the airline reported losses of over 44 million euros last year and that 'airBaltic' is suspending the idea of listing its shares on the stock exchange, or IPO. But it is clear that additional funds are necessary. The company believes that for successful financing of its operations in winter, it will need an additional 100 to 150 million euros, which the company is now trying to attract through private investors. If this fails, the management of 'airBaltic' does not rule out that it may again seek help from the state," reported Latvian TV.
"Unfortunately, we are currently suspending this IPO process and looking at other ways to attract capital to the airline," noted airBaltic's CFO Vitolds Jakovlevs.
Money will definitely be needed. The airline expects that in order to successfully enter the next year, an additional 100 to 150 million euros will be necessary. International consultants have been engaged, who will now look for strategic investors. If this does not work out, they will seek help from shareholders. The largest shareholder of airBaltic is the Latvian state.
"Potentially, another airline could take over 'airBaltic'. This is one of the options. The goal is to attract funds in the private market. But if there are no other possible solutions, then, of course, we will talk to our shareholders about the necessary capital. Then, as the company's management, we do not rule out any potential sources of capital," Jakovlev said in an interview with Panorāma.
"Last year, the management changed, and strategic goals were revised. A huge amount of work has been done, which we see in the case of reducing these losses.
At the same time, I would like to see not just one or two proposals, but several – how we could engage both society, the surrounding ecosystem, and the state, and how we can do this legally. In fact, EU legislation does not provide for broad state participation in business support. Therefore, there must be nuanced support instruments," explained Minister of Transport Aitis Švinka (Progressives).
