Flick reverses decision on Riga base

RIGA - The Latvian government has received an offer from its airBaltic co-owner, private shareholder Baltijas aviacijas sistemas (BAS), to alter the airBaltic shareholders agreement and move the airline’s head office out of Riga, to Vilnius, said Transport Minister Uldis Augulis (Union of Greens and Farmers) in an interview with LNT on July 25, reports Nozare.lv. BAS explained that the airBaltic base should be moved to Vilnius because of the Lithuanian airport’s “rapid growth.”
Augulis stressed that the state did not support this proposal, and believes that airBaltic, the country’s national airline, must remain centered in Riga.

The proposal to move headquarters is yet “another provocative statement” by airBaltic President Bertolt Flick and is not in line with Latvia’s economic interests, Economy Minister Artis Kampars (Unity) said on the matter. Kampars reiterated that the state still owns the majority of airBaltic shares, and that Flick is not only the owner of BAS, but he has also received a mandate from the state to manage the airline according to the state’s interests.

Kampars believes that Flick should cooperate with the state and participate in the development of the airBaltic stabilization plan to ensure the airline’s successful development and make use of Riga’s advantages as the center of the Baltic region.
At the July 25 shareholders’ meeting, both shareholders agreed to launch talks on review of the airBaltic shareholders’ agreement, said Transport Ministry State Secretary Anrijs Matiss. The shareholders, however, did not decide on a possible increase of airBaltic share capital, since the airline’s management had not yet provided the necessary information. Nevertheless, the information should be provided during the coming days and the issue will be brought back to the table.
Matiss emphasized that the state must know the airline’s positions that will require additional funding.

Flick previously said that the airline’s share capital must be increased for the further development of the airline, including fleet modernization. He wants another 100 million lats (142.8 million euros) for the project.
Flick participated in the meeting, however, via video conferencing, as he is running the company at a distance - from his base in Germany.

Amidst arguments that the state should get out of the business of running an airline, that it should sell its shares to private investors and instead focus on improving transparency and open competition at Riga’s airport, Prime Minister Valdis Dombrovskis (Unity) said after a meeting with President Andris Berzins on July 26 that there are no plans to sell the state’s shares as its goal is still “to ensure the airline’s successful development.”

Dombrovskis explained that the audited report on airBaltic operations in 2010 will be presented by Aug. 1, and the Cabinet also wants to become acquainted with the airline’s operations in the first half of 2011.
The government owns 52.6 percent of the airline, with 47.2 percent owned by BAS, which itself is owned by Flick together with offshore company Taurus Asset Management Fund Limited, registered in the
Bahamas.