Latvian government promises over 50 million euros to support Rīga airport

The government has decided to support Rīga International Airport operations during the state of emergency with 54.42 million euros by increasing the company's equity capital and halting dividend payments for the previous year, according to the Transport Ministry on April 23.

The company's equity capital will be increased by 49.91 million euros, while 4.51 million euros from 2019 dividends will stay in the hands of the airport. According to Transport Minister Tālis Linkaits (New Conservative Party), in this way the government hopes to help the airport survive the crisis brought on by the spread of the Covid-19 novel coronavirus, and stabilize operations in the main regional transport center that manages important strategic security infrastructure.

“I'm sure that after the state of emergency has been lifted both our businesses and residents will need convenient connections to the Baltic region and Europe. Right now it's important to ensure airport operations while there is reduced demand,” said the Linkaits.

As previously reported, in 2019 Rīga airport had the best financial indicators in its history, as the airport served 7.8 million passengers. The government's emergency measures restricted international flights, almost completely halting the airport's operations. Passenger numbers compared to April of last year have decreased by 99.9%.

That the scale of the impact of the Covid-19 crisis isn't yet known, so the airport board has modeled several different scenarios for resuming operations and developed a clear plan of action for minimizing costs. This includes the total costs of economic activity - both personnel costs and infrastructure development projects.

The government support will ensure operational activities during the state of emergency and allow important investment projects to continue.

Also reported, Rīga International Airport told the press on March 23 that it had 500 of its employees on downtime with their wages cut significantly, and that the company plans to cut the number of employees on its payroll drastically by June 2020. 

The company board said that the airport will cut investments by 85%, running costs by 60% and personnel costs by 40%. The airport is heavily affected as its income has been all but wiped out, down 98% from before the virus outbreak. 
 

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