FlyLAL may resume business

  • 2009-07-02
  • By Nathan Greenhalgh

TAKE TO THE SKIES: FlyLAL announced it would resume flights if it won the court case against airBaltic and Riga's Airport. AirBaltic claimed the announcement was an attempt to influence the outcome of the case.

VILNIUS - Defunct Lithuanian national airline flyLAL has announced that if it wins a court case against its Latvian rival airBaltic and Riga International Airport it will resume flights from Vilnius.
"If we win it, we will not use this money to repay shareholders' debts but we will keep this money inside the company to restore flights," Gediminas Ziemelis, representative of flyLAL shareholders, told The Baltic Times.

FlyLAL is in the midst of a lawsuit against both airBaltic and Riga International Airport, seeking about 200 million litas for what it claims are illegal business practices. FlyLAL alleges that money airBaltic received from an 80 percent discount in airport fees from the Riga airport was used to push flyLAL out of business by cost dumping.
The Latvian government owns the majority stake in both airBaltic and the Riga airport, and will be forced to pay the money should the lawsuit be successful.

Ziemelis expressed optimism that the case would be decided in flyLAL's favor.
"We delivered to the court the documents, the expertise based on the independent experts," Ziemelis told The Baltic Times. "Unfair discounts with separate carriers were used … to takeover the market without economic logic."
A decision isn't expected to arrive anytime soon, though, as the main proceedings have yet to begin.
In January Lithuania's Court of Appeals upheld the seizure of 200 million litas in assets of airBaltic and Riga International. However, it revoked the order on the seizure of airBaltic and Riga International bank funds and overturned prohibitions for the respondents to offer and receive special discounts at the airport.

The court based its decision on a previous judgment of Latvia's Competition Council. Since then no assets have been confiscated and the case has stalled.
According to Tadas Vizgirda, vice president of airBaltic and general manager of the Lithuania division, neither airBaltic nor Riga International Airport have received official claims against them.
"It's difficult for us to comment if we don't even know the charges against us," Vizgirda told TBT.
"All those pretrial motions have simmered down. Now we're waiting for the primary case to start, but this is still going to take some time. It's an extremely long wait. To be honest with you, it will be a year," Vizgirda said.

Vizgirda dismissed Ziemelis' announcement of flyLAL's intention to resume flights as an attempt to bend justice in flyLAL's direction.
"It's more PR games from Mr. Ziemelis," Vizgirda told TBT. "Hopefully the judges will look into the facts and not the PR statements of the plaintiff … courts are supposed to be completely objective and go off evidence and not statements made to the media and hopefully the Lithuanian court system is better than that."

Since the collapse of flyLAL in January, Lithuania has become cut off from many large European capitals. London, Paris, Berlin and Rome can no longer be reached by direct flight.
This directly hampered tourism 's despite Vilnius' designation as 2009 European Capital of Culture the amount of visitors is down and the country may lose up to 20 percent of its hotels by the year's end (see story Page 5).
The Ministry of Transport and Communications, which owns Vilnius International Airport, said it will continue trying to find new airlines to service Lithuania regardless of whether flyLAL comes back online.

"The Ministry of Transportation welcomes all companies that want to open new flights from Vilnius or to Vilnius. The state cannot act and cannot influence the legal actions. We cannot be involved in the court procedures that are taking [place between] two private companies," said Rimvydas Vastakas, transport and communication vice minister.
"If the company will get this money, well, it's up to them what to do, how to act."