Latvian airBaltic might need additional money, CEO hints
airBaltic, the flag carrier of Latvia, might need additional financial support from the government of the country if the situation with the COVID-19 related travel restrictions does not change by the spring 2021.
Martin Gauss, the CEO of airBaltic, hinted that the Latvian airline would not need any additional support if flights resume in spring and return to the usual levels in the summer of 2021, reported a local broadcaster. Overwise, the air carrier would seek to get more injections to its capital as it would be unable to fully cover all the costs needed with running the business.
In May 2020, the government injected €250 million in the airline’s share capital, meanwhile converting a €36 million worth of governmental loan into airBaltic‘s shares. Gauss said that the airline did not expect the market recovery in January 2021, but it hoped that the government would ease restraints either in March or April 2021. The Head of the airline bet on the vaccine to help the aviation industry to get back on its feet.
Due to the COVID-19 outbreak, airBaltic is predicted to suffer a net loss of up to €300 million at the end of 2020. Despite non-optimistic projections, the airline adapted its “Destination 2025” business plan, setting out its five-year strategy for a period of 2020-2025 to take into account and deal with the consequences of the economic downturn. airBaltic reported having suffered a €185 million loss in the first half of 2020.
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