RIGA – The government’s decision last month to invest more than $30 million in airBaltic is stated to be a move intended to maintain the rapid development pace of the dynamic carrier but critics seems extravagant during Latvia’s current recession.

Ministers confirmed to journalists late Tuesday that the government would indeed invest 15.6 million lats (€22.2 million) in the carrier as decided in a closed session meeting last month, an amount proportional to its 52.6 percent ownership stake. In all, the company will boost capital by 30 million lats, with the remainder to come from minority shareholder Baltijas Aviācijas Sistemas, which is controlled by [private_supervisor]airBaltic CEO Bertolt Flick.

Transport minister Kaspars Gerhards was quoted by BNS as saying that the capital will allow airBaltic, which carried 2.7 million passengers last year, up 6.4 percent year-on-year, to solidify its position in the Northern and Eastern European markets. Another report quoted Gerhards as saying that the funds would be used toward purchasing new aircraft.

Regardless, the company has adopted an aggressive policy of expansion. Last month it announced the opening of a hub in Tallinn Airport in June. airBaltic currently has seven routes from the Estonian capital and no doubt will add more as the year progresses.

At the same time, Flick has stopped short of saying that airBaltic would acquire Estonian Air, which could be up for privatization something this year. Estonia owns 34 percent of the carrier, and the government had authorized the Economy Ministry to negotiate a deal with SAS, which holds a 49 percent stake.

Estonian Air posted a €11 million loss last year, compared with an approximate €20 million profit for airBaltic.

In the meantime, Latvia and airBaltic are grappling with airport congestion. The existing terminal in Riga has reached its capacity, nearly 5 million passengers per annum, and the transport ministry is calling for construction of a new terminal with that could handle 7 million passengers per year.

Gerhards has said that as the government is broke the best way to get the new terminal built would be to lease airBaltic the land and allow the carrier to finance the project using its own resources.

The cost of a new terminal is estimated at €92 million. [/private_supervisor] [private_subscription 1 month]airBaltic CEO Bertolt Flick.

Transport minister Kaspars Gerhards was quoted by BNS as saying that the capital will allow airBaltic, which carried 2.7 million passengers last year, up 6.4 percent year-on-year, to solidify its position in the Northern and Eastern European markets. Another report quoted Gerhards as saying that the funds would be used toward purchasing new aircraft.

Regardless, the company has adopted an aggressive policy of expansion. Last month it announced the opening of a hub in Tallinn Airport in June. airBaltic currently has seven routes from the Estonian capital and no doubt will add more as the year progresses.

At the same time, Flick has stopped short of saying that airBaltic would acquire Estonian Air, which could be up for privatization something this year. Estonia owns 34 percent of the carrier, and the government had authorized the Economy Ministry to negotiate a deal with SAS, which holds a 49 percent stake.

Estonian Air posted a €11 million loss last year, compared with an approximate €20 million profit for airBaltic.

In the meantime, Latvia and airBaltic are grappling with airport congestion. The existing terminal in Riga has reached its capacity, nearly 5 million passengers per annum, and the transport ministry is calling for construction of a new terminal with that could handle 7 million passengers per year.

Gerhards has said that as the government is broke the best way to get the new terminal built would be to lease airBaltic the land and allow the carrier to finance the project using its own resources.

The cost of a new terminal is estimated at €92 million. [/private_subscription 1 month] [private_subscription 4 months]airBaltic CEO Bertolt Flick.

Transport minister Kaspars Gerhards was quoted by BNS as saying that the capital will allow airBaltic, which carried 2.7 million passengers last year, up 6.4 percent year-on-year, to solidify its position in the Northern and Eastern European markets. Another report quoted Gerhards as saying that the funds would be used toward purchasing new aircraft.

Regardless, the company has adopted an aggressive policy of expansion. Last month it announced the opening of a hub in Tallinn Airport in June. airBaltic currently has seven routes from the Estonian capital and no doubt will add more as the year progresses.

At the same time, Flick has stopped short of saying that airBaltic would acquire Estonian Air, which could be up for privatization something this year. Estonia owns 34 percent of the carrier, and the government had authorized the Economy Ministry to negotiate a deal with SAS, which holds a 49 percent stake.

Estonian Air posted a €11 million loss last year, compared with an approximate €20 million profit for airBaltic.

In the meantime, Latvia and airBaltic are grappling with airport congestion. The existing terminal in Riga has reached its capacity, nearly 5 million passengers per annum, and the transport ministry is calling for construction of a new terminal with that could handle 7 million passengers per year.

Gerhards has said that as the government is broke the best way to get the new terminal built would be to lease airBaltic the land and allow the carrier to finance the project using its own resources.

The cost of a new terminal is estimated at €92 million. [/private_subscription 4 months] [private_subscription 1 year]airBaltic CEO Bertolt Flick.

Transport minister Kaspars Gerhards was quoted by BNS as saying that the capital will allow airBaltic, which carried 2.7 million passengers last year, up 6.4 percent year-on-year, to solidify its position in the Northern and Eastern European markets. Another report quoted Gerhards as saying that the funds would be used toward purchasing new aircraft.

Regardless, the company has adopted an aggressive policy of expansion. Last month it announced the opening of a hub in Tallinn Airport in June. airBaltic currently has seven routes from the Estonian capital and no doubt will add more as the year progresses.

At the same time, Flick has stopped short of saying that airBaltic would acquire Estonian Air, which could be up for privatization something this year. Estonia owns 34 percent of the carrier, and the government had authorized the Economy Ministry to negotiate a deal with SAS, which holds a 49 percent stake.

Estonian Air posted a €11 million loss last year, compared with an approximate €20 million profit for airBaltic.

In the meantime, Latvia and airBaltic are grappling with airport congestion. The existing terminal in Riga has reached its capacity, nearly 5 million passengers per annum, and the transport ministry is calling for construction of a new terminal with that could handle 7 million passengers per year.

Gerhards has said that as the government is broke the best way to get the new terminal built would be to lease airBaltic the land and allow the carrier to finance the project using its own resources.

The cost of a new terminal is estimated at €92 million. [/private_subscription 1 year]

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