European Commission supports Latvia investing €250 million in airBaltic

On Friday evening, the European Commission (EC) supported the decision of the Latvian government to invest up to €250 million in the capital of the national airline airBaltic to support its COVID-19 crisis management plan, news agency LETA was informed by the EC on July 3.

According to the Transport Ministry, state aid will help to better overcome the negative impacts on the airline caused by COVID-19 and stabilize the national aviation industry.

Transport Minister Talis Linkaits (JKP) said that he is pleased with the decision taken by the EC. "airBaltic is and will be the cornerstone of the Baltic aviation industry.

“The decision confirms that the Latvian government has chosen a timely and appropriate instrument to support the company,” says the Minister.

Linkaits also added that the indirect economic impact of the company is important and airBaltic's work is directly and indirectly linked to around 30 000 jobs in Latvia.

According to the Ministry, the EC considers that increasing airBaltic's share capital by an amount of up to €250 million is a necessary, appropriate and proportionate measure. This will help to better overcome the negative impact caused by COVID-19 and will stimulate the country's economic recovery.

airBaltic has previously stressed that each part of the investment will be secured in line with market rules, without exceeding the amount of losses caused by the crisis caused by the Covid-19 pandemic.

airBaltic's Destination 2025 business plan foresees a fleet of 50 Airbus A220-300 airplanes over the coming years, which means that the number of employees will exceed 2000. The new plan involves reducing its fleet of planes for coming years, initially resuming flights with 22 “Airbus A220-300” planes. The new plan takes into account reduced seating capacity for 2020 and 2021, while expecting a return to growth with 50 Airbus A220-300 planes by the end of 2023. The option of ordering an additional 30 Airbus A220-300 planes remains for future.

The Latvian State currently holds 80,05% of airBaltic's shares, while the financial investor, Danish businessman Lars Toursen, owns almost 20% of the shares.

airBaltic's share capital is EUR 256 472 824 million, according to information from Firmas.lv.

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