Limits of fair play tested by airBaltic

  • 2010-09-22
  • From wire reports

RIGA - The Estonian Consumer Protection Board issued a warning on Sept. 17 that when consumers begin to make travel plans, they should take into account the problems encountered by some with the activities of the aviation firm airBaltic, reports EPL Online. The Board said that it has been contacted by several consumers over the past few days who have bought plane tickets with favorable prices based on airBaltic’s advertising campaign, but received an announcement from the aviation firm soon afterward that canceled the flight the consumer bought.

The Estonian Consumer Protection Board finds that any ad campaign must include in the conditions published the main elements of the campaign – in the current case also the fact and warning that it is a test to find out the sustainability of the planned flights, and that if they are not sustainable, airBaltic reserves the right to change travel plans and annul flights.
Based on the complaints of consumers, the offers that are still posted on airBaltic’s Web environment and the statements made in the press by airBaltic’s board member, the Board said that its initial evaluation says unfair trading methods have been used, which is forbidden with the consumer protection law.

Considering the abovementioned, the Consumer Protection Board initiated surveillance proceedings towards airBaltic. “No matter how the situation from canceling the flights is solved, it does not compensate for the dissatisfaction of people and, due to the cancelled trip, the time and emotional cost, the extra reorganization it brings,” said the Estonian Consumer Protection Board director general, Andres Sooniste.

The Latvian airline’s deputy president, Janis Vanags, said that the sale campaign that ended last week tested the viability of some flight routes and when they proved nonviable, they were closed for the winter due to a shortage of clients.
Despite some marketing problems, airBaltic has been included among five nominees for the award of ‘World’s Best Low-Cost Airline’, reported The decision to nominate airBaltic for the award comes from a panel of independent judges of the forthcoming World Low Cost Airlines Congress. The other four nominees are Tiger, AirAsia, Ryanair, SpiceJet, and Air Arabia.

Bertolt Flick, president of airBaltic, said in response that the nomination of airBaltic in the top league of low-cost carriers was recognition of the airline’s low-cost structure and affordable ticket prices.
Hainan Airlines, one of China’s largest airlines, has taken note and is interested in acquiring shares in Latvia’s national airline. Unofficial talks are taking place concerning the possibility of selling 48 percent of airBaltic to the Chinese company, according to a Sept. 12 edition of the TV3 show ‘Nothing Personal.’

After selling 48 percent of airBaltic shares to Hainan Airlines, the state would be left with 4.7 percent, and the remaining shares would remain in the possession of Flick.

Representatives of Hainan Airlines are said to have met with members of the Latvian government in Riga and in Beijing. As yet there have been no clear results to these talks; however, there is said to be a significant chance that the Latvian airline will change hands after the election, according to ‘Nothing Personal.’
The show indicated that a letter had come into its possession where an official at the Chinese Embassy in Riga informed state institutions of the visit to Riga of a representative of Hainan Airlines’ owner HNA group, with a view to investigate possible investments in Latvia, and in airBaltic in particular.

Economy Minister Artis Kampars and Flick are said to have met with the representative in April this year, although Kampars explained that any investor in airBaltic would be sought through an open tender. Prime Minister Valdis Dombrovskis (New Era) is also said to have met with high officials of HNA group in Beijing, but the premier denied that any such meeting had taken place.

Dombrovskis indicated that the Chinese company could hold talks with Flick, who was free to act as he wished with his shares, but that the state was not currently intending to dispose of its own, especially during the current economic downturn, where share prices were depressed.

HNA group has a value of 23 billion dollars, and its subsidiary Hainan Airlines has recently begun expansion into Europe. Riga airport and the rapidly growing airBaltic is of interest to the airline as a transit base in Europe; the deal would result in Latvia gaining direct flights with Beijing, which would further develop economic relations between the two countries.
Any such deal could be complicated by the relationship between airBaltic and Flick, as the airline’s brand is still under Flick’s ownership, and the airline president has right of first refusal on the state’s share package.

AirBaltic serves more than 80 destinations from its home base in Riga. From each of these, the airline offers convenient connections via Riga to its network spanning Europe, Scandinavia, Russia, CIS and the Middle East.