LAL backs away from deal with airBaltic

  • 2006-03-08
  • From wire reports

 

RIGA - AirBaltic, Latvia's national airline, has been forced to postpone new routes from Vilnius to Warsaw and Dusseldorf after Lithuanian Airlines backed out of a deal to lease a Boeing 737.
"LAL has offered airBaltic to lease one of its Boeing 737 planes. Both companies have agreed on the terms of lease.

However, LAL changed its mind at the very last minute and refused to sign the agreement," airBaltic said in a statement. "Previously seen as a reliable partner, LAL has ruined its reputation completely."
Gediminas Ziemelis, a member of LAL's board, confirmed that the lease had been agreed to but put the onus of responsibility on the Latvian airline.

"The agreement on leasing the Boeing plane had to be signed on Jan. 6. However, airBaltic delayed the signing on grounds that the company's management had not passed a respective decision. We could not wait that long and were forced to take respective measures," Ziemelis told the Baltic News Service.

He added that LAL would lease one of its Boeings to a business partner in Italy, while another would probably be leased to Scandinavia's FlyMe.

Last year airBaltic, which launched flights from Vilnius in 2004, increased its market share at Vilnius International Airport to 24.93 percent. The company is already giving LAL, which was privatized last year, a run for its money.

AirBaltic officials said that LAL's hostile move would force the Latvian air carrier to launch flights to Warsaw and Duesseldorf from May instead of March.

LAL, which is 100 percent privately owned, is expected to be taken over by Sweden's FlyMe Europe. It held 43.3 percent of the passenger market at the Vilnius International Airport last year, a decline of 2.87 percentage points from the 2004 figure.

The state of Latvia owns 52.6 percent of airBaltic, while SAS holds a 47.2 percent stake