Airport, Financial Services, Latvia, Transport

International Internet Magazine. Baltic States news & analytics Friday, 05.06.2020, 06:45

IPO among the options for airBaltic’s future ownership

BC, Riga, 02.08.2018.Print version
Latvian carrier airBaltic could pursue an initial public offering (IPO) as one of its ownership options, as its 2018 performance continues to track ahead of 2017, informed

In 2015, German businessman Ralf Dieter Montag-Girmes acquired 20% of the airline following a four-year privatization process. That stake was then sold on to Danish entrepreneur Lars Thuesen in 2017.

However, the Latvian government has continued to look to further privatize some of its remaining 79.99% shareholding, with a strategic investment from another airline as the ideal scenario.

“The election is in 80 days and I do not expect any announcements before a new government is formed, but that [privatization] process is going on,” airBaltic CEO Martin Gauss told ATW on the sidelines of the Farnborough Air Show.

Gauss said an IPO is one potential outcome. “There is also an option for the airline to go public. We would likely see that in spring or summer next year if something is happening. There is no urgency because we have placed the [A220] order with the financing abilities we have today. It’s an option, but it is not something that is decided.”

An IPO could be well timed, because airBaltic is set to deliver its strongest ever performance in 2018, further-improving on 2017’s record figures.

“We have had a very successful start to 2018, beating our best year in 2017 in terms of passenger numbers and financial results. We are ahead of our revenue and profit targets for the year. The numbers are looking good, despite the fact that fuel prices are going up. Each time we use an Airbus A220 instead of an older aircraft, we are making a cash saving on fuel. We don’t see a drop-in demand on the passenger side,” Gauss said.

Riga-based airBaltic is looking to become the reference carrier for the Baltic region under its Horizon 2021 strategy. Under Gauss’ leadership, the airline has returned to profitability and is rapidly expanding its operations in Tallinn, Estonia and Vilnius, Lithuania.

Gauss said airBaltic will operate any route that makes sense within the A220’s range. “There are no limits. We would do any route in any country,” he said.

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