Airport, Financial Services, Latvia, Legislation, Loan, Transport

The ministers backed the Transport Ministry's proposal to add a clause on the airline's capital increase to Latvia's 2016 budget bill.

Under the updated budget bill the State Treasury will lend up to EUR 80 million to airBaltic on the condition that the loan does not affect the budget.

Also, the deal has to ensure both a private and state investment in airBaltic.

The decision has yet to be approved by Saeima.

As reported, 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 EUR 52 million into the airline, and in turn get a 20% stake in airBaltic, whereas the state will have to invest EUR 80 million in the airline. Increasing the share capital of airBaltic is necessary so it could pursue its business plan and modernize its fleet.

However, several ruling coalition parties have expressed their objections to loaning EUR 80 million to airBaltic.

In December 2012, airBaltic agreed with Canadian plane manufacturer Bombardier on ordering ten "CSeries 300" aircraft, and in July 2014 airBaltic announced it would order three more aircraft from Bombardier.