Lithuanian Airlines to be privatized next year

  • 2004-10-13
  • From wire reports
VILNIUS - Following the failure to sell Lietuvos Avialinijos (Lithuanian Airlines) last year, privatization officials said they would undertake another attempt to sell off the flagship carrier in 2005.

The State Property Fund, which manages a stake in LAL on behalf of the state, will announce a new tender to privatize the carrier next year. Antanas Malikenas, SPF director for privatization, told the Baltic News Service that experts had already launched arrangements for a new LAL privatization program.

Valdemaras Salauskas, Ministry of Transportation state secretary and a supervisory council member at LAL, said that the government was drafting a decision on the fate of the airline, which is still 100 percent owned and in the red financially.

"In our opinion, the company cannot proceed in its present state any longer. We should decide what to do next - whether the state should invest in the carrier or if it should attract other investors," Salauskas said.

"Last year when we made the first attempt to sell a stake in the company, its financial position was rather poor. By now the company has been put in order - it has shrugged subsidiaries off and reduced the staff, and it operates in common EU airspace," Malikenas said.

"Accordingly the program, including the terms, requirements for investors and the price, will be different. Last year the price was symbolic," he said, hinting that next time around the company would cost significantly more.

LAL operates three leased Boeing-737-500s, owns two Boeing 737-200s and is expected to lease an additional two Boeing crafts in the near future. Also, the carrier intends to remove two Saab-2000s from its fleet in late 2004.

The tender to privatize a 34 percent stake in LAL with an option to buy the remaining 66 percent, announced in the spring of 2003, ended in failure as the sole bidder, Scandinavia's SAS, eventually dropped out of the bidding.

LAL reported operating revenues of 95.4 million litas (27.6 million euros) for the first half of 2003, a rise of 2.7 percent year-on-year. The carrier trimmed its interim losses by 5.4 percent to 3.5 million litas.