The craft, piloted by Sergejs Abramenko, landed by a gas station on the highway to Tallinn to refill after circling for quite some time just above the treetops near Baltezers Lake.
When Abramenko throttled to take off, the helicopter became entangled in power lines and crashed on the road. No motorists were injured.
The helicopter caught fire, killing Klavins and leaving Abramenko with burns on 90 percent of his body.
Witnesses said Abramenko was in shock after the crash. Before losing consciousness, he said he had been powerless to control the helicopter, according to Baltic News Service.
The surrounding neighborhood was without electricity for several hours, and the highway to Riga was closed for some time.
Monika Savicka, head of the state burns treatment center in Bikernieku Hospital, told The Baltic Times that Abramenko's condition was very critical.
"He is able to breathe on his own and is partially conscious, but he has sustained damage to his respiratory system from breathing in hot smoke," Savicka said.
Famous Latvian composer and former leader of the New Party, Raimonds Pauls, was one of the witnesses of the crash. When the helicopter came down it narrowly missed his car.
"The accident was like something out of an American movie," Pauls told BNS. "There was an explosion and a great noise as the helicopter crashed. I don't want to imagine what could have happened if this had occurred in an area with a lot of people."
The Latvian civil aviation administration was quick to respond to the accident and the general director of the administration, Andis Zalmanis, said in an interview on the television news show "Panorama" that he assumed pilot error was the cause of the crash.
"It was not normal, though, to land at a regular gas station to fill up," he said. "This accident will be thoroughly investigated."
The helicopter was the only one of its kind in Latvia. It was bought and partially reconstructed by Bank of Latvia President Einars Repse in 1996. Kristaps Otersons, Repse's spokesman, said Repse sold the helicopter to Klavins' tourist company Via Riga last year for 45,000 lats ($71,400).
When asked how Repse was feeling after hearing about the accident, Otersons said: "They were personal friends so, of course, he feels badly about what happened."
Klavins, aged 48, was active in various business projects in Latvia and co-owner of several companies operating in trade, tourism and recreation, including Via Riga, Mode Plus, Solidas and Ars Vivendi, to name a few. One of his latest projects was to build and manage a hotel in front of St. Peter's Church in Riga's Old Town.
The helicopter crash was not the only aviation accident to have occurred recently in the Riga area.
Two days after Klavins' death, a small motor-glider plane was involved in an accident at Riga Airport during an amateur plane gathering there. State police reported that a wind gust caused the plane to tilt to just 1.5 meters off the ground as it was taking off, causing one of its wings to scrape the grass beside the runway. After this, the plane veered straight into a construction site. Nobody was injured in the accident.
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