Lithuania should not invest in airBaltic until airline turns profitable, president says

VILNIUS - It would be irresponsible for Lithuania to invest in Latvia's loss-making national airline airBaltic until it returns to profitable operations, Lithuanian President Gitanas Nauseda said on Friday.

"The company needs to make very radical decisions to reduce costs and increase its yield. Until such guarantees are in place, I believe it would be quite irresponsible to make any generous promises - while we do not see how the company's rise (...) from the ashes and its profitable activity will be ensured," Nauseda told reporters on Friday.

According to the president, all financial aspects and risks must be evaluated before considering any acquisition of airBaltic shares.

Nauseda noted that Lithuania remains interested in the success of the Latvian airline to ensure maximum flight connectivity during Lithuania's presidency of the European Union Council.

"Let us not view the presidency solely as our officials' trips to Brussels and back. It is a very broad field of activity involving extensive travel, including to all EU members, the 26 state capitals besides Vilnius. There will be much activity, much travel, and for that reason, the convenience of transport is a very important aspect," Nauseda emphasised.

Prime Minister Mindaugas Sinkevicius said in Riga on Wednesday that if Latvia made an offer, Lithuania would consider acquiring a stake in airBaltic, but only after assessing all arguments and prioritising its own interests.

Earlier this week, Transport Minister Juras Taminskas said that if an offer to acquire shares were presented, he would not support it, calling it an "emotional action".

The Latvian parliament on Thursday gave its preliminary approval to potential state participation in ensuring airBaltic's financial stability. This includes the acquisition of up to 30 million euros in interim financing bonds and the capitalisation of existing bonds worth 50 million euros.

Latvian Prime Minister Andris Kulbergs said this week that this was the last chance to save airBaltic.