Germany’s Lufthansa named as ‘strategic investor’ in Latvia’s airBaltic / Article

“Lufthansa Group will receive a convertible share granting a 10% stake, which will be issued at a subscription price of EUR 14 million and converted into ordinary shares upon a potential IPO (Initial Public Offering) of airBaltic,” said an announcement by airBaltic.

“After the IPO, the size of Lufthansa Group’s stake will be determined by market pricing of the IPO, and amount to no less than 5%,” it added.

airBaltic said the decision of the German giant to invest represented “an important milestone on our journey towards IPO and a stamp of international approval for Latvia’s national champion.” 

However, the announcement of the IPO’s precise timing is yet to be made and was described as “subject to market conditions.” 

Whenever the IPO does happen, the Latvian state will maintain at least a 25% stake in airBaltic. Meanwhile Lufthansa Group will appoint a Supervisory Board member upon closing its initial investment which is planned for the second quarter of 2025, subject to regulatory approval.

Rumors that Lufthansa was the oft-discussed ‘strategic investor’ have been circulating for months, but are now confirmed.

For its part, Luthansa described the deal as “building on the existing wet lease agreement between Lufthansa Group and airBaltic and intends to strengthen airBaltic’s role as a strategic partner of Lufthansa Group. Expanding this commercial cooperation allows Lufthansa Group to improve the quality of its network and to add additional markets. Additionally, a further product development of the wet lease services in line with our customer expectations is planned.”

“Wet leasing” is a term in commercial aviation used to describe an arrangement in which one airline leases an aircraft and all or part of its crew from another airline.

“Just recently, the wet lease agreement between Lufthansa Group and airBaltic has been extended for a further three years beyond the summer of 2025. This partnership enables [Lufthansa] to flexibly deploy up to 21 additional aircraft of the fuel-efficient Airbus A220-300 in summer and five aircraft of this type in winter at various Lufthansa Group hubs,” said a release.

“The Lufthansa Group has been working with airBaltic since 2019, which has proven itself to be a reliable and valuable partner,” it added.

To read an interesting piece on the German airline’s long association with Latvia, you might like to look at this recent feature.
 
 

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