RIGA - Latvian tour operator Tez Tour is considering the possibility of purchasing an airline to help increase profit and advance services after closing out the year with a high turnover rate.
Director Konstantins Palgovs said this isn't the first time the company has considered buying an airline.
"We will possibly look in the direction of aviation. Some years ago we were in a tandem participating in a competition on privatization of Lithuanian airline FlyLAL. We know how to do it. Now FlyLAL is developing successfully without our participation, but we once consulted them," he told the Diena Latvian-language daily.
However, Palgovs said that they will approach the market with caution.
"We never enter a new niche just to attach another medal. We are doing what is necessary for us as a tour operator. If we consider that we do not have enough carriers in a country, we might take this road. We are creating infrastructure for our business," he said.
Palgovs explained that development and new products are easier to carry out abroad, such as in Turkey, while the situation in the Baltics isn't as stable.
"In the Baltic states it is all related with demand. It is very unstable. At the time when a plan to invest was adopted, there was one situation, but now it has changed for worse more than we even thought," he said.
He said that during the time of crisis the company will be more aggressive in the market, trying to invest in weak and dropping markets where smaller investment could result in bigger profits.
Despite the current trends and the economic downfall, Palgovs hopes for at least a half million euro profit.
"We would like the profit to be about 0.5 million euros. But we understand that November and December usually show a drop in the industry," he said.
Palgovs remains optimistic as well, saying that regardless of the market situation, Tez Tour's year has been fruitful.
"At present there is still inertia in the market. This year's results will be super. Reality will show with agreements to be signed from January 2009. At present everybody has sat down, but the movie has not started yet. It will start soon and then it will be interesting," he said.
Palgovs reported that the company is working on offering news destinations, and new technological solutions to retain and strengthen their market positions.
"Players are leaving the market as they are not able to compete and their market shares are left with other players. We are happy to take over new market shares," he said.
Palgovs also said that the company's market share in Latvia is about 40 percent depending on the season.
Latvia's Tez Tour intends to close 2008 with a 23 million lat (32.7 million euro) turnover, the company reported earlier. In 2007 Tez Tour generated 15.751 million lats in sales 's a 45 percent increase from 2006. The company earned 1.386 million lats in profit in 2007, almost double that of 2006.
Tez Tour is an international tourism operator that opened its first branch in Latvia in April 2002 and consists of 11 international companies.