VILNIUS - A total of four investors has submitted applications for Lithuania's national airline, and the stage was set for bidding to open May 16.
The State Property Fund said that it has received four bid applications for Lietuvos Avialinijos (Lithuanian Airlines), though earlier it had announced the sale of eight privatization dossiers. Bids were accepted until 10 a.m. May 5.
Media reports claim that both Lithuanian and foreign companies are represented in the four applications, including Iceland Express, a carrier based in the north Atlantic island country.
The Baltic News Service reported that the other three bidders are consortia made up of Lithuanian companies. Novaturas, the largest tour operator in the Baltics, previously announced it would team up with Kautra, a bus company, and Hermis Capital, a leading investment firm, for the 100 percent stake in LAL. The other two potential investors include Fima, an IT solution firm, together with Aurela, a private air carrier and Tez Tour, another tour operator, and finally the Kaunas-based cargo handler Arijus, which owns Aviakompanija Lietuva, a small air carrier.
SAS, the Scandinavian-owned airline that controls airBaltic, Latvia's national airline, and Estonian Air, has said it would not take part in the bidding.
Hans Olongren, corporate and public relations manager at the SAS Group, stated that the company purchased the privatization dossier and, after studying LAL's financials, decided not to participate. Two years ago it backed out of the botched privatization of LAL reportedly because the asset was overpriced.
Armis Valiulis, CEO of Arijus, was quoted as saying, "We have already entered the aviation business, and we see great possibilities to merge Aviakompanija Lietuva and Lithuanian Airlines. The routes of two companies will supplement each other perfectly."
Privatization officials hope to receive some 9.3 million litas (2.7 million euros) for the carrier. The tender winner will have to invest a minimum of 10 million litas in the LAL's authorized capital within a two-year period and retain at least 80 percent of jobs for one year. LAL currently has an authorized capital of 9.6 million litas but has been operating in the red.
In 2004 the airline posted losses of 9 million litas due to higher fuel prices, fleet expansion and a reduction in the value of fixed assets. Revenues and passenger turnover, however, rose sharply. In 2004 LAL carried 442,300 passengers, and expects its passenger flow to surge by one-third this year. According to the company's estimates, it held a 48.3 percent share of regular flight market at Vilnius Airport last year.