The Latvian government is once again suggesting that all three Baltic states jointly coordinate the operations of the Latvia-owned airline airBaltic. So far, Estonia has not agreed to acquire a stake in the company.

airBaltic’s efforts to raise additional funds have so far been unsuccessful. An IPO, i.e. listing shares on the stock exchange, is currently off the agenda, and the war in the Middle East has reduced investor interest in the Latvian airline. Lufthansa’s stake only took effect recently.

Although passenger numbers have increased in the first quarter, the doubling in aviation fuel prices has once again reduced earning potential.

The Latvian government has agreed to grant airBaltic a €30 million short-term loan, but the airline needs more money by the end of the year.

Latvian Prime Minister Evika Silina this week suggested the topic should be discussed with neighboring countries.

Latvian Prime Minister Evika Silina. Source: Jürgen Randma / Government Office

“I believe that we need to coordinate aviation in the Baltic region together. I will discuss the situation that has arisen with my Baltic colleagues in both Estonia and Lithuania, because I know that they also actively use Air Baltic flights,” she said.

Silina did not specify what Latvia expects from Estonia and Lithuania. Previously, the countries were offered a stake on the same terms as Lufthansa, but Estonia said no and decided to invest in direct connections via Tallinn Airport.

Lithuania’s previous government fell before a decision was reached. However, current ministers told ETV’s evening news show “Aktuaalne kaamera” that the issue is not on the agenda.

Estonia has not so far received any new proposal from Latvia regarding the airline, but Prime Minister Kristen Michal (Reform) said any proposals will be discussed.

Tallinn Airport. Source: Jarek Jõepera

“But it does not mean we will immediately agree to them. Owning an airline is not an end in itself,” he told “Aktuaalne kaamera.”

“Often, if you look at today’s world, it is rather a loss-making activity. But having flight routes and direct connections is certainly important, and here we have made a deliberate choice in Estonia by investing through the airport. A few years ago, we put €15 million into Tallinn Airport and are considering additional investments precisely because the airport is expanding, more passengers are coming, and airport fees are low. This means that airlines themselves use it as a place to operate flights from,” he said.

airBaltic is currently planning to increase flights from Tallinn. The Latvian prime minister said the airline’s longer-term business plan is still being developed.

While previous CEO Martin Gauss shared his thoughts with the public in both good and bad times, little is known about the plans of the new head, Erno Hilden, beyond the goal of reaching profitability.

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