Latvia intends to grant airBaltic's shares to Lithuania and Estonia.
airBaltic, the national airline of Latvia, has announced a significant change in its strategic direction. The updated goal now prioritises profitability, competitiveness, and ensuring flights from Riga Airport, marking a departure from previous ambitions of geographical expansion and numerous new destinations.
This new focus signifies a more cautious and realistic approach to operations, eschewing aggressive route or base expansion in favour of a stronger impact in the Northern region and Riga. Notably, the updated goal has removed previous national strategic objectives related to expansion outside Latvia and innovation, although the airline will still maintain flexibility for commercial opportunities like aircraft leasing.
In a move aimed at deepening regional collaboration within the Baltic states, the Latvian Ministry of Transport has proposed offering shares in airBaltic to both Lithuania and Estonia. This proposal indicates a concerted effort to integrate the interests of these neighbouring countries in the airline's development.
However, Estonia has shown some reservation, partly due to airBaltic’s current financial losses. Yet, officials acknowledge that the airline can still operate profitably from Tallinn even without Estonian ownership. Lithuania’s involvement via shares would presumably align its interests with Latvia and contribute to a joint effort to support airBaltic's stability and growth.
The market situation will be assessed in the coming months to determine if there will be willing buyers in autumn, or if global events will have affected the stock market. airBaltic's Chairman of the Board, Andrejs Martinovs, suggests that summer would be the ideal time to approach neighbouring countries for investment, with an alternative being spring for the Initial Public Offering (IPO).
Prime Minister Evika Siliņa (New Unity) believes this investment is of interest to neighbouring countries for the development of their airports. The investment from Lithuania and Estonia, along with Lufthansa, in airBaltic is expected to strengthen regional cooperation and improve the IPO investment story.
The Baltic partners will be offered a structured participation mechanism to strengthen regional cooperation and improve the IPO investment story. airBaltic will continue to maintain flexibility to exploit commercial opportunities in other markets, such as full-service aircraft leasing services.
This strategic shift towards profitability and self-sufficiency is expected to benefit the broader Baltic region, reinforcing airBaltic’s operations based in Riga and strengthening its position in the Northern region. The Ministry of Transport (SM) has named airBaltic's overall strategic goal as profitability and ensuring airBaltic flights from Riga Airport.
Prime Minister Siliņa respects the desire of the prime ministers of Estonia and Lithuania not to discuss these issues politically, but to leave it to the capital companies. The offer for a strategic partnership is being made only now, despite previous interest.
As airBaltic moves forward, the focus will be on maintaining profitability, ensuring flights from Riga Airport, and deepening regional collaboration with Lithuania and Estonia. This new strategic direction marks an exciting new chapter for airBaltic and the broader Baltic region.
- The Latvian Ministry of Transport proposes offering shares in airBaltic to both Lithuania and Estonia, aiming to integrate their interests in the airline's development.
- Lithuania’s involvement via shares would presumably align its interests with Latvia, contributing to a joint effort to support airBaltic's stability and growth.
- The strategic shift towards profitability and self-sufficiency in airBaltic's operations is expected to benefit the broader Baltic region, reinforcing its position in the Northern region.
- The Ministry of Transport (SM) has named airBaltic's overall strategic goal as profitability and ensuring airBaltic flights from Riga Airport, marking a departure from previous ambitions of geographical expansion.
