airBaltic puts off upfront payment for Bombardier planes

Take note – story published 8 years and 4 months ago

Latvia's flag-carrier airline airBaltic has postponed making advance payments for the Bombardier planes it intended to buy as the deal with investor Ralf-Dieter Montag-Girmes has not been concluded yet, so the company hasn't received the funding it needs, reported LSM's Latvian-language service Monday. It appears however that the company has made the advance payment from its own operational funds, reported Latvian Radio 4.

In order to modernize its fleet with Canadian Bombardier planes, airBaltic needs the agreed-upon €52m investment from Ralf-Dieter Montag-Girmes, as the state can grant its share of €80m only after the deal has been struck. Montag-Girmes has not signed the agreement yet. 

However the news are not exactly a surprise as Kaspars Ozoliņš, the State Secretary at the Transport Ministry, told Latvian Radio last week that such a scenario is possible, stressing that talks are still held with the investor.

"The state is ready to sign the agreement at any time. We are now waiting when the investor will have sorted his own things out [..]. We are communicating on a regular basis and trying to understand the situation. The holiday weeks - Christmas and New Year - interfered somewhat, slowing it down for some two and a half weeks. However we have information that [the conclusion of the agreement] will happen soon," said Ozoliņš. 

Later Jānis Vanags, Vice President of Corporate Communications at airBaltic told Latvian Radio 4 that the company paid the advance payment from its own operational funds. 

On November 3 the government approved an investor for the national airline airBaltic that had been suggested by the Prudentia consulting company - the German businessman Ralf Dieter Montag-Girmes. He will invest €52m into the airline, and in turn get a 20 percent stake in airBaltic, whereas the state will have to invest a further €80m.

On December 3 the Latvian parliament voted for lending €80m from the State Treasury to the national airline airBaltic. 

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