Lithuania drafts plan in case airBaltic cuts operations or withdraws

VILNIUS - Lithuania is drafting a contingency plan in case Latvian carrier airBaltic reduces its operations or withdraws from the country due to financial difficulties, Lithuanian Transport Minister Juras Taminskas said on Thursday.

However, the minister urged against premature panic, saying the current risks were being managed.

"It would be very unpleasant and indeed a certain shock in the short term if airBaltic were to stop flights, but we are managing the risk at this time," Taminskas told reporters in the Lithuanian city of Klaipeda.

He said a meeting with the management of Lithuanian Airports was scheduled for next week to discuss short-term responses to a potential reduction or cessation of airBaltic services.

Taminskas emphasized that airBaltic continues to operate for now and that a withdrawal should not be viewed as inevitable. Should the carrier exit, other airlines, including Poland's LOT and Finnair, could fill the gap, he added.

Meanwhile, airBaltic noted that Lithuania remains an important strategic market for the airline and that there continues to be strong demand from Lithuanian passengers.

"All existing reservations remain valid, and flights are operating according to schedule. airBaltic remains committed to its obligations toward Lithuania and strives to connect the country with Europe," airBaltic said in a statement to the BNS news agency.

As the airline notes, based on recommendations from international financial and legal advisors, a revised business plan has been developed with the aim of strengthening the company’s financial and operational foundation, ensuring business continuity and long-term stability.

As previously reported, Latvian Finance Minister Maris Kucinskis said in early July that airBaltic would likely have to scale back operations due to financial constraints.

Latvian Prime Minister Andris Kulbergs earlier said the company could not operate without additional financial support. According to Kulbergs, negotiations are underway with three potential investors to ensure the airline no longer requires annual taxpayer funding.

AirBaltic is currently reviewing its business plan while seeking new investment and financing. The Latvian finance minister said in early July that the company would likely need to downsize, while the prime minister stressed the need for further financial support.

International rating agency Fitch Ratings has placed the company and its bonds on negative watch.

AirBaltic operates at two Lithuanian airports: Vilnius and Palanga. Last year, the group's turnover grew by 4.2 percent to EUR 779.3 million, although it reported a loss of EUR 44.34 million. The airline carried 5.2 million passengers last year.