Baltic air wars intensify

  • 2008-10-29
  • By Dorian Ziedonis

ESCALATION: Lithuania's national airline was forced to hand tens of thousands of euros over to Riga airport as the conflict between the two massive Baltic companies intensified.

RIGA - Lithuania's flagship carrier FlyLAL-Lithuanian Airlines was forced to pay up on Oct. 27 accumulated debts of 40,000 euros to secure the release of one of its planes impounded the previous day at Riga's international airport. The aircraft's seizure left three passengers stranded on FlyLAL's final flight of the summer season back to Vilnius.
This tit-for-tat series of retaliations started with FlyLAL claiming sustained damages of close to 200 million litas (58 million euros) due to an alleged unfair competitive advantage enjoyed by airBaltic through favorable treatment by Riga Airport, allowing airBaltic to offer lower fares.
On Sept. 25, a Vilnius regional court ruled in favor of a request from FlyLAL to freeze almost 200 million litas' worth of airBaltic and Riga Airport assets.

Riga Airport next suspended FlyLAL's Oct. 26 morning return flight to Vilnius, alleging unpaid bills totalling tens of thousands of lats.
Riga Airport spokesman Martins Langrats said they had repeatedly presented bills to the captain of the FlyLAL aircraft, a Saab 2000, as the Lithuanian airline had been running up invoices since mid-summer and showed no willingness to make arrangements on the payments.
The aircraft was refused permission to take off until the company settled its debts, said Langrats.
Vytautas Kaikaris, CEO of FlyLAL, asserts that "Riga airport played a pretty rough trick on us on the last day of the season. The motivation for the action was that we had some debts, but the truth is that we had only current expenses, which we paid today. We think that gesture from the airport was inadequate and frantic, made specially in supporting airBaltic against us."

Kaikaris also said "I am surprised by public statements made by Latvian Minister of Transport Slesers, his attempt to politicise the case brought against airBaltic and Riga Airport... All these actions and the last event testify that the Latvian government, and in particular Minister [Ainars] Shlesers, tries to compete with and impose not generally accepted or legal business practices on others but [carries on with] rather drastic, malicious and uncivilized behavior."

Adding grist to the mill, Minister Slesers on Oct. 20 said that FlyLAL would soon go out of business and that "Lithuanians will mourn for the good times when airBaltic planes used to fly from Vilnius."
The Lithuanian Transport Minister Algirdas Butkevicius accused Slesers in a press release of political incorrectness for his comments, saying that "Slesers' statement regarding FlyLAL is unfounded and forms an unfavorable opinion about the Lithuanian company. Such comments by a neighboring country's government officials about operations of Lithuanian companies and their financial situation are unacceptable to Lithuania."
FlyLAL has no scheduled flights to the Latvian capital during the winter season. The Saab 2000 has flown safely back to Vilnius.

(Additional reporting by Giedre Virbalaite, Vilnius)