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AirBaltic in need of massive investment as losses mount

Aug 19, 2011
TBT Staff

AirBaltic in need of massive investment as losses mount
airBaltic suffered losses of more than 30 million lats last year. (photo: airBaltic)

RIGA -- Latvia's national airline, airBaltic, has requested more than 60 million lats in capital as its losses continue to mount.

Around half of the money would come from converting bonds owned by the Latvian State Radio and Television Center (LVRTC) and by the airline's minority shareholder "Baltijas aviacijas sistemas" (BAS), Transport Minister Uldis Augulis said. AirBaltic, of which the state is the majority shareholder, saw losses of more than 30 million lats (nearly $70 million) last year.

The mounting financial problems at the airline are having political as well as economic consequences. Prime Minister Valdis Dombrovskis has said that Augulis could lose his job if the minister fails to improve the situation.

He said it would be difficult to support recapitalization without knowing what happened to the 15 million lats that the government previously provided the airline.

AirBaltic president Bertolt Flick, who has been connected to a major anti-corruption investigation, said that the government's failure to immediately increase the airline's capital was "destructive". He called a meeting Friday to discuss serious changes in the commercial operations of the airline.

AirBaltic currently has the lowest share and personal capital of any European airline.

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