RIGA - Latvian national airline airBaltic currently has more than half a million passengers booked on the flights for the future, said airBaltic board chairman Martin Gauss in a letter to airBaltic customers.
Today, exactly three weeks ago, airBaltic temporarily stopped its scheduled operations due to the coronavirus. Gauss said that the aviation industry in Europe and in most countries around the world has been affected like never before. Passenger bookings for travel by air have been significantly reduced globally, and by almost 100 percent in Latvia.
He said that before the crisis, airBaltic was showing outstanding results. The company closed the year 2019 with a new record for passengers transported. The number of destinations exceeded 80, and the airline’s financial performance was above our expectations, reaching revenues of more than EUR 500 million.
Gauss said that this historic crisis has had a dramatic effect on the company's employees. "We were forced to make a hard decision and reduce our workforce by 700 employees, while still retaining more than 1,000 employees who are not working while we do not fly," Gauss said.
"Employment is one of the key factors for a good economy, and this is why we need to ensure that airBaltic is able to restart again after the crisis is over. We promised our employees to re-employ them as soon as possible, but nobody today is able to say when that will be. However, thanks to our strong cash position, we are able to pay employees until mid-May and provide decent additional compensation, while having nearly no income from scheduled operations," said Gauss.
Once the restrictions are lifted, airBaltic intends to start its operations with only five Airbus A220-300 aircraft. The company then plans to gradually add one aircraft per week as demand returns. The company already made a decision earlier to discontinue flying its Boeing and Bombardier Q400 aircraft fleet. "With the new reality, we will bring forward this decision to simplify our operations and restart by offering a product with only the Airbus A220-300. airBaltic still has up to 80 A220-300 aircraft on order, and we will try to negotiate an optimum delivery schedule to support our future growth," the airline's head said.
"Over time, the demand for travel is expected to return. Therefore, we have adjusted our network so that we can continue providing air connectivity to the Baltics and eventually grow back to our previous levels. As several thousand aircraft are currently parked across the continent, it is very difficult to predict what will happen with European aviation. Bringing these aircraft back into the air will take some time, and it also depends on how individual countries recover from these difficult times. The stimulation of Latvia’s economy will also surely depend on the performance of airBaltic," he said.
airBaltic turned over EUR 503.2 million in 2019, a 23.1 percent increase against 2018, and sustained a EUR 7.729 million loss in contrast to a profit made year before, the company's audited statement shows.
The Latvian state currently owns 80 percent in airBaltic, and a 20 percent stake in the airline belongs to Aircraft Leasing 1, a company owned by Danish businessman Lars Thuesen.