AirBaltic has announced that it will receive a €250 million investment from the Latvian government.
The Latvian cabinet approved the move in a bid to help its flag carrier overcome the financial impact of the ongoing global health crisis.
AirBaltic chief executive Martin Gauss stated in the release that the money would be used to help the airline implement new strategies once the pandemic comes to an end.
“With this new equity investment, we can begin to execute our new business plan Destination 2025 CLEAN, which focuses on a new start for airBaltic once international flights resume,” Gauss said.
“This will facilitate successful growth for the company once the impact of the COVID-19 crisis begins to ease.”
The Latvian government’s plan, which remains subject to the approval of the European Commission, is to provide its investment to airBaltic in tranches. Each investment tranche will be provided in line with market rules and will not exceed the losses caused as a result of COVID-19 crisis.
Following such investment, the Latvian state’s shareholding in airBaltic will increase from 80.05 per cent to 91 per cent.
On 23 April, the supervisory board of the Latvian airline airBaltic approved the new business plan of the company presented by the management of airBaltic.
The new plan foresees a reduced fleet for the upcoming years, initially resuming operations with 22 Airbus A220-300 aircraft. The new plan takes into account the reduced capacity for the years 2020 and 2021, while at the same time foresees return to growth with up to 50 Airbus A220-300 aircraft by the end of 2023. The additional 30 options of Airbus A220-300 remain for future growth.
In other airline news:
- The SIA group, which includes Singapore Airlines, SilkAir and Scoot, is expected to post its first full-year loss in its 48-year history when it releases results on Thursday. Over the past, it’s had close shaves due to various other global catastrophes. Yet the coronavirus pandemic is proving to be a hurdle like no other.
- Starting on 13 May, Delta will suspend operations at the following airports through September: Chicago Midway International Airport (MDW), Oakland International Airport (OAK), Hollywood Burbank Airport (BUR), Long Beach Airport (LGB), T.F. Green International Airport (PVD), Westchester County Airport (HPN), Stewart International Airport (SWF), Akron-Canton Airport (CAK), Manchester-Boston Regional Airport (MHT), and Newport News/Williamsburg International Airport (PHF)
- Kazakh carrier Air Astana announced yesterday that it would resume scheduled flights out of the country’s two largest cities, Almaty and Nur-Sultan, to regional airports across Kazakhstan. This resumption of services is to follow the end of the national state of emergency, which will officially take place on 11 May.
- The Brazilian Development Bank (BNDES) and Bradesco (one of Brazil’s largest banks) are putting together a financing package for the country’s airlines. It is expected that a final agreement will be reached by the end of next week with the disbursement expected to take place in the second half of June.
- Serbia’s Finance Minister Siniša Mali said this week that the state could support Air Serbia in acquiring new aircraft for a post-COVID expansion. This move could involve both short-haul and long-haul growth, and so could involve a whole range of new aircraft.
- Emirates was able to report an overall profit for its 2019-20 fiscal year. In fact, its main hub at Dubai International Airport was essentially shut down due to the UAE government’s decision to completely suspend passenger services in March.
- Southwest Airlines has entered into an agreement to sell 10 Boeing 737-800s and 10 Boeing 737 MAX 8 aircraft. The airline announced the sale in a filing on 8 May. However, Southwest will leaseback the aircraft. This agreement will give the airline $815 million in cash.
- Copa Airlines’ CEO Pedro Heilbron said that the airline is not requesting, nor expecting, any aid from the Panamanian government. He added that currently, the government has more significant issues to deal with. In the meantime, the airline has managed to reinforce its liquidity with a $350 million bond offering.
- The CEO of IndiGo, Ronojoy Dutta, has told his airline employees that they will be facing pay cuts and unpaid leaves in the next two months. The largest Indian airline is facing the brunt of this ongoing coronavirus pandemic.
- In signs of a slight recovery, Wizz founder and CEO József Váradi has told the BBC that his airline is selling around 75 per cent of seats on its flights right now.