airBaltic brand stuck in ‘tug of war’

  • 2010-09-01
  • From wire reports

RIGA - Although Latvian Transport Minister Kaspars Gerhards (For Fatherland And Freedom/LNNK) has been explaining since the beginning of August that the details of the return of the airBaltic brand to the airline will be decided in “the coming days,” the Transport Ministry has now explained that the matter must wait until the election of a new airBaltic council, which, originally planned for a general meeting of the company’s shareholders on Aug. 30, will be delayed by at least one week, reports The ministry also explained that the new council would be the first to hear the report being prepared by a special committee formed to investigate the details and legality of last year’s brand sale.

The ministry had been silent during August concerning the candidates that it might forward as representatives of the state on the new council, who would then have to decide on the return of the brand and on the work of the previous council. Gerhards has merely explained that these individuals would be recognized and qualified experts.

Gerhards and airBaltic chief Bertold Flick currently appear divided on the timescale for the return of the airline’s brand, as Flick maintains that the brand will only be returned when financial figures allow this. Gerhards had earlier this month said that the financial situation of the airline could not be an obstacle to the rapid return of the company’s brand.
Flick’s position is that the company’s financial situation did not allow the immediate return of the brand, though the airline’s financial situation in the second half of the year was better than in the first, as is usually the case for any airline. The capital received by the airline through the brand sale, according to Flick, was necessary to ensure financial backing for the acquisition of several new aircraft, for which certain minimum financial figures were required.

Predicting the time period for the return of the brand, Gerhards announced that he saw this taking place in the near future, rather than in several years’ time, adding that Flick had made clear his readiness to go through with this. According to the minister, there are a range of factors which would enable the returning of the brand in the very near future. Gerhards also explained that agreement had been reached with Flick that “the legal and financial issues should be resolved as quickly as possible so that we can complete the agreement on paper.”

The Transport Ministry has nominated former Maras bank President Niks Bulmanis, Latvijas Valsts radio un televizijas centrs board member Gints Kirsteins and Riga International Airport council member Uldis Martinsons (New Era) for inclusion on the new airBaltic council.

In December of last year, airBaltic sold the airBaltic brand and all related trademarks to Baltijas aviacijas sistemas for 14 million euros. Baltijas aviacijas sistemas, which owns a 47.2 percent stake in the airline, is owned by Flick.