Baltic States – CIS, Banks, Financial Services, Investments, Latvia, Transport

Vladimir Antonov.

"I know who wants to buy airBaltic and who wants to invest money into the airline, one way or another. I know these people very well. And all I can say is: rest assured, you may safely buy tickets and fly airBaltic. I know for certain that the operations of airBaltic will not come to a halt. Of course, we have to keep in mind that there may also be others who might want to buy airBaltic, comments Antonov.

Antonov believes that now is not the right time for the government to sell state-owned airBaltic shares, because the price for these shares will not be high. Nevertheless, a management model must be developed for the airline that would generate profit for the state, writes LETA.

Antonov also notes in the interview that Convers Group has not been offered to buy airBaltic. On the other hand, if a major aviation market player wished to buy airBaltic shares and applied for a loan from Snoras or Latvijas Krajbanka, such an application would be reviewed and the loan would be issued most probably.

"It all boils down to the risk. If it was "Virgin", there would be no problems, but I do not think that "Virgin" will want to buy anything here. The key factor for all the participants in the process, including the banks that provided the money and the company, is the position taken by the state," says Antonov, explaining that the state can either sell its shares in airBaltic or organize a new share issue. The government must not give up, pretending that the problem does not concern them. Instruments must be found to support airBaltic, as well as an investor has to be sought to ensure further development of the airline. The value of the airline depends on how these matters are tackled, hysterically or in a civilized manner, says Antonov.

As reported, Economy Minister Artis Kampars (Unity) said at the beginning of June that airBaltic operated with a loss of LVL 18 million in the first five months this year and was close to bankruptcy. The minister believes that the huge loss was created on purpose, to "pump out funds" from the company.

Kampars said that he had received alarming information. "Last year Latvian government invested more than LVL 15 million into the company to make sure that airBaltic can buy new planes on lease and continue development. airBaltic head and co-owner Bertolt Flick was showing the government his business plan that was promising a large profit this year and in 2012 – instead, the company is losing enormous money," said Kampars.

Kampars sharply criticized airBaltic management mode, where large part of processes that are important to airBaltic daily operations – financial management, service provision, fuel supplies – have been entrusted with companies that are directly connected with Flick's private company. On the other hand, the actual owners of his private company are unknown as they control it via offshore companies.

On the other hand, during a press conference in Berlin on June 15, Flick directed harsh words towards Latvian officials and announced that he is prepared to purchase the State of Latvia's majority shares in airBaltic. When asked where he would once again obtain so much money to purchase the shares, Flick did not wish to answer.