After ultimatums, insults and threat of a government fall, airBaltic secures short-term loan

RIGA - A majority of Saeima members on Thursday voted to grant a short-term state loan of EUR 30 million to Latvia's national airline airBaltic.

The Saeima decided to grant the company the loan by 49 votes to 23, and one abstention. Meanwhile, 15 MPs from the opposition United List and National Alliance chose not to register for the vote.

airBaltic needs the loan because of a steep rise in fuel prices. The government approved the loan on March 31, but because of objections and ultimatums from the Union of Greens and Farmers, the issue was stalled for several weeks, delaying the parliamentary vote.

After several weeks of disputes, disagreements between the parties represented in Prime Minister Evika Silina's (New Unity) government over support for airBaltic had escalated to such an extent that on Wednesday Silina did not rule out a breakup of the government coalition.

Members of the Greens/Farmers group in the Saeima insisted on a "three-point proposal", which included the resignation of Transport Minister Atis Svinka (Progressives) in exchange for Greens/Farmers' support for granting the EUR 30 million to airBaltic.

Greens/Farmers promised their support for the loan if they were presented with a clear plan on how the financially troubled airline would be returned to profitability, if Svinka resigned as transport minister and took political responsibility for the failure to control the situation, and if Silina assumed political responsibility for the implementation of airBaltic's new business plan.

The Progressives responded by saying that they have no intention to consider Greens/Farmers' demands, while New Unity called on coalition partners to negotiate and agree on the work ahead.

In the talks, which took place on Thursday morning, the coalition partners managed to agree on working together. Silina said that in accordance with the agreement, Transport Minister Atis Svinka would have to ensure that airBaltic becomes a profitable company. If not, Svinka will have to take responsibility, the prime minister said.

Furthermore, Silina said that the Transport Ministry needed to be reorganized because "many projects have stalled". She expects the ministry to be reorganized in the near future.

As reported, Silina said Wednesday that she is ready to let the government coalition break up if that helps secure the Union of Greens and Farmers' support for a short-term loan to Latvia's national carrier airBaltic.

The prime minister wrote on X that Greens/Farmers on Tuesday offered their support in the parliamentary vote on the loan to airBaltic in exchange for Svinka's resignation.

"If a disintegration of the coalition is the price for securing support for airBaltic, I am ready," Silina said, stressing that support to the airline is more important to her than keeping the government coalition together.

LETA also reported, the Transport Ministry has indicated that external factors such as the conflict in the Middle East, rising fuel prices and the suspension of certain routes have had a significant impact on airBaltic's costs, and the airline needs a EUR 30 million loan to ensure the company's stable operations until the implementation of its new business plan.

However, the Saeima Budget and Finance (Taxation) Committee did not approve the decision because of objections raised by the Union of Greens and Farmers.