AirBaltic wins billion euro investment

RIGA - AirBaltic CEO Bertolt Flick has announced that the company will see approximately 1 billion euros (700 million Lats) in investment over the next three years.

Flick told journalists that t majority of the investment would go toward improving and upgrading the fleet, Latvian national news agency LETA reported.

He said the massive investment would be made possible thanks to a government decision earlier this week to make immediate investments into the company -- a decision that some local commentators have attacked as wasteful expenditures at a time many other areas are facing budget cuts. 

The Latvian government currently controls more than 52% of shares in the company, giving it a decision making power than it has been loath to give up despite numerous offers from other European airline giants.

Ministers confirmed to journalists late last night that the government would indeed invest 15.6 million Lats (22.2 million euros) in the carrier as decided in a closed session meeting last month. In the current round of investment, the company will boost capital by 30 million lats, with the remainder to come from minority shareholder Baltijas Aviacijas Sistemas.

Thanks to the increased share capital of "airBaltic", the airline was able to receive more advantageous financing offers from banks, Flick said.

The newest planes in the airBaltic fleet are 19 years old, LETA reported.