Air Baltic in trouoble?

[j636]

BT lost €18 million in the first 5 months of year. Rumors are there is concern for the carriers future.

[JSCL]

Doubt there's much room for concern I'm afraid. Majority government backed and a loss during off peak like many airlines, no biggy.

[davidjohnson6]

Doubt there's much room for concern I'm afraid. Majority government backed and a loss during off peak like many airlines, no biggy.

JSCL - I'm not saying this because I find your post offensive or anything, but I'm just puzzled as to what you actually mean in this comment.
I understand that Air Baltic is government owned, but I don't understand the point you're trying to make. Perhaps you could clarify a little ?

[JSCL]

In terms of concern for a carriers future, a government owned flag carrier for such a small country will always get bailed out so that is survives.

[racedo]

JS

Not if EU have a say in it which they will.

[ConstantFlyer]

Original post needs clarification. Is j636 just making a supposition based on the loss? If so, is there a point to this?

[Charlie Roy]

Not if EU have a say in it which they will.

The EU disregarded most of their rules to allow Alitalia to survive, so airBaltic should be fine. Tlhe first 5 months of the year are always loss making. It's rather unfortunate that this "airBaltic in trouble?" thread exists. Pose the question in the regular airBaltic thread instead of spawning undue uncertainty.

[DannyKelly22]

Their route to Dublin has been cancelled as of the end of the summer

[Jamie2k9]

Riga – Beirut – Amman – Riga Canceled from 13SEP11
Riga – Dublin Canceled from 01SEP11 (resumes March 2012)
Riga – Geneva Service already canceled since 10JUL11
Riga – Kaliningrad Reduce from 2 to 1 Daily from 14AUG11 (This has been already reduced from 3 Daily to 2)
Riga – Palanga Reduce from 2 to 1 Daily eff 30OCT11
Riga – Tartu Canceled from 01AUG11
Riga – Lulea Service appears to be not resuming in Winter 2011

[JobsaGoodun]

In terms of concern for a carriers future, a government owned flag carrier for such a small country will always get bailed out so that is survives.

Not necessarily. Press reports suggest that the government don't have the funds and aren't keen to throw good money after bad. It is them questioning the viability and integrity of the business. Flybe's new venture with Finnair us sure to make life even more challenging for air Baltic too. Things don't look especially rosy for the coming months.

[davidjohnson6]

The Latvian Government need to ask themselves - are they prepared to pump money into Air Baltic to bail them out, or are they willing to see a combination of Ryanair and Wizzair be the dominant airlines at Riga, along with feeder flights to hubs on various major network airlines like Lufty, Scandinavian, Czech, Austrian and Finnair as happens at Vilnius / Kaunas ?

If the Government wants to see a substantial Latvian airline based at Riga, they need to pay big lumps of cash to Air Baltic. If not, the domestic carrier will slowly shrink with FR and W6 picking off the most profitable routes

[No RYR for me]

from another area of pprune re air baltic:

http://www.pprune.org/biz-jets-ag-flying-ga-etc/456118-ocean-sky-expanding.html

re governement ownership: isnt it also part privately owned?

[dublindispatch]

It actually stops RIX-DUB-RIX end of July.

[pee]

In the news right now:
RIGA -- Latvian national airline airBaltic has announced that it will layoff nearly half of its employees and cancel hundreds of flights as financial problems persist.

The airline said it would layoff around 500 employees from all branches of the company, including pilots and cabin crew.

It said that more than a thousand flights would be cancelled in the coming months, totalling 726 in November and 723 in December.

"This decrease is directly related to the delayed decision on capital increase," said airBaltic CEO Bertolt Flick, who is currently in his home country of Germany. Flick said Prime Minister Valdis Dombrovskis "lacks knowledge and has no right to meddle with operational activities".

The airline has demanded that the government provide a 60 million-lat bailout so that it can continue with planned operations. Last year, airBaltic management saw massive losses of 34 million lats despite enjoying a record growth in traffic.

Dombrovskis had previously said that the state would be able to provide additional funding to the ailing airline, but only on the condition that Flick step down as company chief.
Source: The Baltic Times (http://www.baltictimes.com/news/articles/29582/)

[No RYR for me]

Unfortunately in times of consolidation we still see state interventions in airlines....Why does every country still feels they need (or have control over) an airline.. Not nice for you if you are employed there but in business it is the good old system of the strongest survives... :\

[FR-]

Will be interesting to see which routes are cut. More room for Ryanair, the only route from EMA this winter to be increased is RIX from 3 to 4 weekly.

fr-

[pee]

The bailout has been granted, but under certain conditions:
During a closed Cabinet meeting on September 27, the government agreed to allocate LVL 57.6 million [over 82 million EUR] to increase the share capital of airBaltic. The situation at the national airline airBaltic should have been solved much earlier, President Andris Berzins told the LNT morning show "900 sekundes" today [Sept. 29]. Berzins believes that is not normal that airBaltic shareholders cannot solve the airline's issues, but instead the talks are held with the help of third parties.

If airBaltic’s minority shareholder fulfills its conditions, Transport Minister Uldis Augulis (Union of Greens and Farmers) has been given the authority to sign such an agreement, writes LETA.

The state funding will be provided as a loan from the State Treasury, with the possibility that at least some part of it could be capitalized. The investment by the minority shareholder, Baltijas Aviacijas sistemas, will be proportionate to its stake in the airline, which means around LVL 50 million. This money will be used to cover the airline's operating losses this year and partly next year. Also, part of the funding will be used for modernization of the airline's fleet. Today, the airline's shareholders will hold a meeting, during which decisions on increasing the airline's share capital will most likely be made, as well as changes to the airline's board and council, as well as to the shareholders' agreement.

However, the shareholders have still not managed to agree on the shareholders' agreement, thus it is possible that the state will not agree to the airline's share capital increase and its current president Bertolt Flick will keep his position.

Augulis previously explained that the shareholders' meeting may become a turning point, when "we will see how far we have come."

"I believe that if there is normal cooperation between the shareholders, there will be no obstacles to solve the problem," said the minister.
Quotation from The Baltic Course (http://www.baltic-course.com/eng/transport/?doc=46481)