Government ready to invest in airBaltic

RIGA -- Latvian Prime Minister Valdis Dombrovskis has said that the government is prepared to invest more than 57 million lats in ailing national airline airBaltic.

"The government has made all the necessary resolutions and expressed readiness to participate in stabilizing of the financial situation of airBaltic because the minority shareholder is also ready to do it by constructively fulfilling the government’s conditions. The government has fulfilled its tasks and current responsibility lies in the hands of BAS,” Dombrovskis said.

airBaltic has recently cancelled more than a thousand flights as financial difficulties continue. The airline had requested a 60 million lat bailout to continue operations. The airline is estimated to have lost around 95 million lats over the past few years, despite a steady growth in traffic.

National news agency LETA reported that a shareholders meeting on Sept. 29 will determine whether the airBaltic minority shareholder is prepared to meet the conditions that would come attached to the bailout.

This would include changes to the airline's board and council, as well as to the shareholders' agreement. Specifically, the government has previously said that airline CEO Bertolt Flick must step down.

The government has also recently launched negotiations over the possibility of starting a new airline to replace airBaltic if no agreement can be found.