RIGA — In a closed meeting Tuesday the Latvian government agreed to pump 15.6 million lats (€22 million) into national airline airBaltic, increasing the government’s total share capital to 30 million lats (€42 million).

A capital increase is typically sought in case of negative capital results, to protect future operations or when significant future investment is expected. However, the government said that instead of a bailout, the increase is to provide additional funding for airBaltic’s relentless expansion across the Baltic states in the face of the economic crisis.

The payment will be made via the sale of government bonds to the Latvian State Radio and Television Center in September.

Transport minister Kaspars Gerhards said he was pleased with airBaltic’s 2009 results of €20 million in profit after 2008’s €40 million loss.

airBaltic CEO Bertolt Flick said the money would help cover the expanded operating costs and the building of a new terminal at Riga International Airport in 2013.

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