Latvia starts negotiations over the creation of new airline

2011-09-23
TBT Staff

The government may be willing to let airBaltic fold and create a new national airline in its stead. (photo: airBaltic)

RIGA -- The Latvian government has launched negotitiations over the creation of a new national airline to replace the ailing airBaltic.

airBaltic has cancelled hundreds of flights over the past week and announced massive losses that had previously been hidden from shareholders. Earlier this month the airline management demanded that the government provide a 60 million-lat bailout so that it can continue with planned operations.

The airline is now estimated to have lost around 95 million lats over the past few years, despite a steady growth in traffic.

Karlis Krastins, CEO of the Prudentia consulting company that has been hired to look into the case on behalf of the Latvian government, told national news agency LETA that the government was now in negotiations to launch a new airline to replace airBaltic.

"There is a major risk that the suppliers will be worried, and it will be hard for the airline [airBaltic] to continue operations," said Krastins.