The government's decision to provide a short-term loan of €30 million to the national airline "airBaltic" was not supported by the Saeima's Budget and Finance Committee on Wednesday due to the position of the Union of Greens and Farmers (UGF), Minister of Transport Aitis Švinka told reporters after a closed committee meeting.
The government's decision to provide a short-term loan of €30 million to the national airline "airBaltic" was not supported by the Saeima's Budget and Finance Committee on Wednesday due to the position of the Union of Greens and Farmers (UGF), Minister of Transport Aitis Švinka told reporters after a closed committee meeting.
The committee will return to this issue on April 14. It was previously planned that the loan issue could receive the committee's approval today, allowing the parliament to consider it on the same day.
The Minister of Transport noted that the questions raised by the UGF regarding the loan decision are puzzling and called them political rhetoric. Švinka emphasized that he had previously provided explanations on this matter to the coalition, and on Tuesday the government unanimously supported it.
According to Švinka, the UGF received all necessary information in a timely manner, and the Ministry of Economics, headed by a representative of this party, participated in preparing the decision. "The fact that the faction is unaware of something raises my concerns about the quality of communication between the UGF faction and its ministers," said the head of the Ministry of Transport.
As reported, the government has decided to provide "airBaltic" with a short-term loan of €30 million due to a sharp increase in aviation fuel prices. The loan will be provided until August 31, 2026.
Prime Minister Evika Siliņa stated that "airBaltic" is critical for strengthening Latvia's national security and improving transport connections, thus there are grounds for providing the airline with a short-term loan as aviation fuel prices are rising particularly quickly.
Švinka added that the loan will help stabilize "airBaltic"'s operational activities, but this does not negate the task set for the airline to develop a new business plan and financial stabilization strategy.
Chairman of the "airBaltic" board Andrei Martynov stated that the loan will reduce the negative impact of external factors and the company will be able to repay it on time, while work on the business plan continues.
As previously reported by the Ministry of Transport, at the end of March, "airBaltic" approached the ministry, informing about the impact of external factors on the company's financial and operational activities. The military conflict in the Middle East has caused a significant increase in aviation fuel prices, which increases the company's expenses and affects profitability.
The Ministry of Transport notes that the company continues to operate flights, and a potential loan, if granted, will help maintain a stable route network, avoiding sharp changes and compensating for the pressure of rising fuel prices.
For security reasons, "airBaltic" was previously forced to temporarily cancel flights to Tel Aviv and Dubai, which reduced revenues and affected the efficiency of the route network. At the same time, aviation fuel prices have significantly increased due to the conflict in the Middle East.
As reported, the losses of the "airBaltic" group last year amounted to €44.337 million, which is 2.7 times less than in 2024. At the same time, the group's turnover increased by 4.2% compared to 2024, reaching €779.344 million.
In 2025, the airline transported 5.2 million passengers on its route network, which is 1% more than in 2024.
In August last year, the German airline "Lufthansa" became a shareholder of "airBaltic". Currently, the state owns 88.37% of the shares of "airBaltic", "Lufthansa" owns 10%, financial investor Danish entrepreneur Lars Tuessen through "Aircraft Leasing 1" holds 1.62%, and other shareholders hold 0.01%. The company's equity capital amounts to €41.819 million.
After the initial public offering (IPO) of shares, "Lufthansa"'s stake will be determined based on the potential market price of the IPO. The deal also stipulates that after the IPO, "Lufthansa" will own at least 5% of "airBaltic"'s capital.
In August 2024, the Latvian government decided that after the IPO, the state must retain at least 25% plus one share in the company's capital, and in August 2025, it was decided that the state, like "Lufthansa", would contribute €14 million to "airBaltic"'s capital before the potential IPO.
However, considering the financial results of 2025 and the market situation, "airBaltic" has suspended preparations for the IPO and currently does not consider it a potential source of capital in 2026, according to "airBaltic"'s annual report.
The document notes that despite the expected improvement in operational and commercial activities, the airline will have a negative free cash flow in 2026, and based on current forecasts, the company will need an additional infusion of funds ranging from €100 to €150 million to finance operations in the winter season of 2026/2027.
The Minister of Transport indicated that the IPO is not the only way to attract capital, and the airline's management has been given the broadest mandate to seek funding opportunities using various financial instruments. Thus, the airline's task in 2026 is not only to reduce costs but also to attract capital.
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