RIGA - Frustrated by the Latvian
government's refusal to privatize airBaltic, pan-Scandinavian airline SAS has
finally lost patience and decided to sell its own stake in the Latvian national carrier.
At present the Latvian state holds a controlling
52.6 percent of the shares and SAS holds 47.2 percent of the company, which was established in 1995.
The news broke
in Stockholm on August 14th when SAS spokesman Mikael Lindberg was
asked by Reuters if SAS would sell its stake in airBaltic as the company revealed its half-yearly results. "I
can confirm that," came the brief but informative
reply.
Almost as brief was the
statement issued by airBaltic CEO and chairman Bertold Flick in
response: "The announcement
of SAS to divest and sell its stake in airBaltic does not
change the current growth and development strategy of the
airline." Flick has so far refused further comment.
But the imminent
departure of such a major shareholder with extensive expertise and aviation resources cannot fail to have some
effect, and the question now turns to who will buy SAS's stake and at
what price.
Transport minister Ainars Slesers' spokesman
Girts Dripe told the Baltic News Service that the SAS announcement
was not related with the government's decision not to privatize
airBaltic's shares as much as with differing opinions about the
future development of the company.
However, when The Baltic Times contacted SAS in Stockholm,
spokeswoman Elisabeth Manzi told us that Slesers position was incorrect and that the reason for the sale was clear: "The Latvian state has decided
not to privatize airBaltic. This means SAS cannot become the majority
shareholder and so the board of SAS decided to sell our share," she said.
"There have been ongoing discussions for a while and the Latvian
transport minister will meet with SAS next week."
SAS expressed regret that it had been forced into the decision but
said "We got involved with airBaltic with the aim of becoming
majority owners, so in that sense we are regretful that we will have
to pull out."
SAS would not put a price on its stake in airBaltic and said that
no timeframe for the sale has yet been worked out. It added that it
could not comment on whether any potential buyers had already been in
touch.
Profits
throughout the aviation industry are being squeezed by high fuel
prices and few, if any, airlines have ready cash available. There's
also the fact that anyone in acquisitive mood is currently spoiled
for choice.
Italian national carrier Alitalia still has a for sale
sign hangiing around its neck after takeover deal with Air France/KLM
went sour, British Airways and the Spanish carrier Iberia are
negotiating a partnership that also includes American Airlines and meanwhile even low cost carriers such
as Ryanair are struggling to make a profit.
However,
local rival FlyLAL may be among the potential bidders. There's little
love lost between the Lithuanian airline and airBaltic, but a senior
figure within FlyLAL told The Baltic Times: "If these shares will
be on the table, we will estimate the situation," adding
that part of airBaltic's problem is that it is "wasting money on
unreasonable things."
