RIGA - The Latvian state should allow the private shareholders of the national airline airBaltic to develop it, says SEB Bank macroeconomic expert Dainis Gaspuitis, reports Nozare.lv. Gaspuitis believes that the state should maintain enough influence in airBaltic to ensure the airline’s strategic role and transparency of its operations, whilst it should be developed by its private shareholders, who are the experts.
At the same time, the economist emphasizes that the current budget opportunities and the situation in global aviation can limit the state’s choice about the airline’s further development, therefore the situation’s assessment must be long-term.
Gaspuitis emphasizes that the airline has played a significant role in Latvia’s economy and is the core of the entire air transportation sector, providing support to other sectors, for example - tourism. Therefore the main task is to achieve that airBaltic not only maintains its operations profile and status of national airline, but also continues to develop.
“It is up to the state to decide how to establish relations with other shareholders. However, when assessing the opportunities, it is also necessary to take into account the state’s financial opportunities and ability to ensure adequate management of the airline,” he emphasizes.
On Sept. 5, Union of Greens and Farmers leader Augusts Brigmanis announced that the state should not provide any funds for bailing out airBaltic. “AirBaltic may move their head offices to where they want,” added Brigmanis, stating that the state must not become hostage to the airline.
He believes that an enterprise, which works with losses, “should be given away. It will be another Parex Bank [scenario].”
“There is now information that 170 million lats (242.8 million euros) will have to be invested in the company. Let’s not make pensioners, farmers and teachers hostages, cut their salaries to give money to airBaltic. In my opinion, airBaltic may fly away!”
He does not question that airBaltic is a strategically important company for Latvia, but “if it is not airBaltic, there will be another airline.”
The government of Latvia decided to take part in bailing out the air carrier on Aug. 23 with an additional 33.5 million lats expected to be invested into the airline.
The daily Diena wrote last week that the state might have to invest about 170 million lats in taking over full control of airBaltic. This would be the total investment by the state - purchasing the shares of minority shareholder Baltijas Aviacijas Sistemas, covering the airline’s losses, and making the necessary investments.
Air Baltic Corporation was established in 1995. The company’s majority shareholder is the state of Latvia with 52.6 percent of shares. AirBaltic’s president, Bertolt Flick, owns 50 percent in Baltijas Aviacijas Sistemas, which controls 47.2 percent of shares in the airline.