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BAU-VISIT RIGA-THE OLD CITY
FORMED AND STARTED OPERATIONS IN 1995. FORMER LATVIAN DIVISION OF AEROFLOT (ARO). SCHEDULED & CHARTER, REGIONAL & INTERNATIONAL, PASSENGERS & CARGO, JET AIRPLANE SERVICES.
RIGA INTERNATIONAL AIRPORT
LV-1053 RIGA, LATVIA
LATVIA (REPUBLIC OF LATVIA) WAS ESTABLISHED IN 1990, IT COVERS AN AREA OF 64,589 SQ KM, ITS POPULATION IS 2.8 MILLION, ITS CAPITAL CITY IS RIGA, AND ITS OFFICIAL LANGUAGE IS LATVIAN.
JULY 1995: THE LATVIAN GOVERNMENT OWNS 51%, BALTIC INTERNATIONAL USA (BIUSA) OWNS 49% (INCLUDING 18% OF SCANDINAVIAN AIRLINES (SAS). THE INTENT IS TO FORM THE LATVIAN FLAG CARRIER.
THE GOVERNMENT APPROVES OPERATIONS.
A K A "AIRBALTIC" WHO STARTED OPERATIONS IN OCTOBER 1995, RIGA TO LONDON.
SERVICES TO FRANKFURT, DUSSELDORF, HAMBURG, AMSTERDAM, BERLIN, COPENHAGEN, LONDON, MOSCOW, STOCKHOLM, ST PETERSBURG, WITH EXPANSION TO KIEV, VIENNA, AND WARSAW. USES AIRPLANES FROM LATVIAN AIRLINES (SHAREHOLDER). LATAVIO, GOVERNMENT OWNED HAD SCHEDULED SERVICE LICENSES WITHDRAWN, TO BE RESTRUCTURED WITH 4 AIRPLANES, CONSISTING OF A MIX OF TU-134A'S & TU-154B'S WITH STAFF REDUCED FROM 550 TO 100. THE GOVERNMENT TO OWN 75%, BIUSA 25%, & OPERATE CHARTER SERVICE.
2 TU-134B'S TO BE REPLACED BY SCANDINAVIAN AIRLINES (SAS) DC-9-21 AIRPLANES.
JANUARY 1996: BALTIA AIR LINES TO OPERATE IN LATE SPRING 1996, NEW YORK TO ST PETERSBURG, 5X-WEEKLY, WITH 747-100, 316 PAX. IGOR DMITROWSKI CHAIRMAN & PRESIDENT.
SCANDINAVIAN AIRLINES (SAS) OWNS 28.5% OF AIR BALTIC (BAU).
JANUARY 1997: NEW LAUNCH SET AS LATE SPRING 1997 FOR NEW YORK TO ST PETERSBURG WITH 747, EX-UNITED AIRLINES (UAL) OR AIR CANADA (ACN), INCLUDING MAINTENANCE & TRAINING.
CHANGED NAME TO "AIRBALTIC (BAU)." HAS ACQUIRED 3 RJ70'S FOR OPERATIONS TO STOCKHOLM, KIEV, COPENHAGEN, HELSINKI, AND FRANKFURT.
MAY 1997: 190 EMPLOYEES (INCLUDING 69 FLIGHT CREW (FC) & 16 MAINTENANCE TECHNICIANS (MT)).
JANUARY 1999: BALTIC INTERNATIONAL USA SOLD ITS REMAINING 8% INTEREST IN AIRBALTIC CORPORATION (SIA), TO SCANDINAVIAN AIRLINES (SAS) FOR $2.14 MILLION.
AUGUST 1999: 2 727-100'S (18440; 18900) PARTED OUT.
JUNE 2001: THE SURVIVING OPERATOR IS "AIRBALTIC" (BAU).
THE GOVERNMENT OWNS 52.58%; SCANDINAVIA AIRLINES (SAS) 34.22%, TRANSAERO (TRX) .22%; & SWEDFUND INTERNATIONAL 6.49%.
January 2003: Plans to acquire a 737 to replace an Avro RJ70. Hopes to replace all its RJ70's and F 50's by the end of 2004.
March 2003: 2002 = 173.32 million (RPK) traffic (+9%); 262,000 passengers (PAX) (+5%); 16.07 million (FTK) Freight Traffic (+8%).
286 employees. SITA: RIXDZBT.
August 2003: In November, Riga to Brussels (3x-weekly).
October 2003: In November, Riga to Amsterdam (4x-weekly). In 2004, to add service to Colgne/Bonn, Dublin, and Oslo.
December 2003: In March 2004, Riga to Oslo (6x-weekly).
January 2004: 2003 = +EUR 1.6 million (+17%): 336,000 (PAX) passengers (+28%); 61% LF Load Factor (+9).
February 2004: In May 2004, Riga to Milan (MXP) (737-500, 3/week).
737-505 (2138-24646, YL-BBA), ex-Braathens (BRT), (GEF) leased.
March 2004: Plans to replace its 3 Avro RJ70's with +4 737-500's and add at least +1 F 50.
April 2004: 295 employees. (http://www.airbaltic.com).
Will base a 737-500 in Vilnius in June 2004, for services to Berlin (TXL) (3x-weekly), Copenhagen (daily), Dublin (3x-weekly), Hamburg (4x-weekly), and Colgne/Bonn (4x-weekly). In August 2004, will base an F 50 at Lithuania's capital to add routes to Helsinki, Oslo, Vienna, and Warsaw.
737-53S (3101-29075, YL-BBD), ex-Air France (AFA), Pembroke (PEB) leased.
May 2004: In August, Vilnius to Helsinki, Oslo (code share with (SAS). Vilnius to Warsaw. Riga to Cologne/Bonn (4/week). Riga to Manchester (737-500, 3/week).
(SAS) intends to exercise options to take majority stakes in AirBaltic (BAU) and Estonian Air (ENA).
June 2004: 737-53S (29073, YL-BBE), Pembroke (PEB) leased.
July 2004: 2003 = +230 Million (Net profit) (+33.2%); 60.6% LF; 335,000 passengers (PAX) (+28.5%); 424,000 (FTK) freight traffic.
August 2004: Last 6 months = +57% (RPM) traffic ; +44% Flights.
September 2004: New Lithuanian hub in Vilnius. Vilnius to Tallinn (F 50 weekdays). In October, Vilnius to Munich (5/week). In November, Vilnius to London Gatwick (737-500, daily).
737-548 (1939-24878, YL-BBF), Aer Lingus (ARL) leased.
October 2004: Unveils a new color scheme for its airplanes.
Code share with Scandinavian Airlines (SAS), Riga to Vilnius.
737-548 (1970-24919), Aer Lingus (ARL) leased.
November 2004: Riga to Stuttgart (RJ70, 4x-weekly). Vilnius to Munich (F50, 5x-weekly).
December 2004: Code share with Pulkovo (STG), Riga to St Petersburg (F 50, 4x-weekly). In March, Riga to Istanbul (2x-weekly). Riga to Barcelona Girona (3x-weekly).
February 2005: Riga to Paris (CDG), to Istanbul, Barcelona, & Munich (737-500, 3/week). In April, Latvia to Munich (737-500, 4/week).
April 2005: 2004 = -EUR 1.2 Million: 589,288 passengers (+75%): launched 9 new routes from Riga & 11 from Vilnius (market share from 9.7% to 20% in 1st Quarter 2005).
May 2005: 292 employees.
July 2005: In August, Riga to Odessa (F 50, 3/week).
August 2005: AirBaltic (BAU) will start service from Riga to the port of Liepaja (F 50, 4/week) in September. This will be its 1st domestic route and the 1st in Latvia in 20 years.
B Ae 146-RJ70 (E1223; E1224; E1225) returned to B Ae Systems.
October 2005: AirBaltic (BAU) celebrated its 10th anniversary October 1. Over the decade, (BAU) enplaned >3 million passengers, launched direct flights to 46 destinations and opened a 2nd hub in Vilnius. The main shareholders are the Latvian state with 52.6% and (SAS) with 47.2%. The fleet numbers 7 737-500s and 7 F 50s.
AirBaltic's (BAU) winter timetable, in effect October 30 to March 26, will feature new nonstop F 50 service from Riga to Dnepropetrovsk 3x- weekly and from Vilnius to Stockholm 6x-weekly. Frequency on several other European routes will be increased, service between Riga and Stuttgart will be discontinued and (BAU) will add 2 F 50s to its Vilnius hub.
November 2005: AirBaltic (BAU) increased its Riga to Oslo frequencies to 9x-weekly. (BAU) and Austrian Airlines (AUL) will code share flights between Riga and Vienna from November 14. The airlines will combine to offer 11x-weekly. Previous agreements between the carriers were cancelled in 2002 over a frequency dispute.
(BAU) will inaugurate nonstop service from Vilnius to Stockholm on January 16th. (BAU) will operate 5x-weekly, Mondays through Fridays, with a Fokker 50. (BAU) will discontinue service from Riga to Cologne on January 22nd. (BAU) is operating that route 3x-weekly, on Mondays, Fridays & Sundays, with a 737-500. (BAU) will inaugurate nonstop service from Riga to Dusseldorf on March 26th. (BAU) will operate 4x-weekly, on Mondays, Wednesdays, Fridays, & Sundays, using a 737-500.
1st 9 months = 859 Million (RPK) passenger traffic (+120%); 78.5 Million (FTK) freight traffic (+121%); 760,000 passengers (+79%).
AirBaltic (BAU) took delivery of +2 more F 50s. Its fleet comprises 7 737s and 9 Fokkers.
December 2005: AirBaltic (BAU) announced it will be opening 4 new routes in spring 2006.
AirBaltic (BAU) will inaugurate nonstop service from Riga to Dusseldorf on March 1st. (BAU) will operate 4x-weekly on Mondays, Wednesdays, Fridays, & Sundays, with a 737-500. AirBaltic (BAU) will inaugurate nonstop service from Vilnius to Dusseldorf on March 28th. (BAU) will operate 4x-weekly, on Tuesdays, Thursdays, & Saturdays, with a 737-500. (BAU) will inaugurate nonstop service from Vilnius to Stockholm on March 26th. (BAU) will operate 6x-weekly, daily, except Saturdays, with an F 50.
AirBaltic (BAU) signed a code share agreement with Ukrainian airline Donbassaero (UDC). AirBaltic (BAU) and Austrian Airlines (AUL) will code share flights between Riga and Vienna.
January 2006: AirBaltic (BAU) carried 93,442 passengers in December, up (+73%) compared to the same month in 2004. President Bertolt Flick said it was the 1st time (BAU) carried >1 million passengers in a year. Load factor in December was 60% LF, up +11 points compared to the year-ago month. For the full year 2005, passenger traffic was 1.161B (RPK)'s (+105%); freight traffic 96.65M (FTK)'s (+87%); & it carried 1,037,925 passengers, (+76%) more than in 2004.
(BAU) will inaugurate nonstop service from Riga to Bergen (Norway) on April 14th. (BAU) will operate 3x-weekly with a 737-500.
(BAU) will add an 8th 737-500 this spring to help drive a route expansion from its hubs in Riga and Vilnius. New services from Riga will include to Dusseldorf, 4x-weekly from March 1, to Warsaw 6x-weekly from March 26, to Simferopol 2x-weekly from April 11, and to Bergen 3x-weekly from April 14. 2x-weekly service to Baku and Tbilisi will commence in May, the latter pending approval from Georgian authorities. (BAU) also will launch flights from Vilnius to Budapest, Dusseldorf, Stockholm, and Warsaw. "We are continuing to implement our strategic plan of performing as many direct flights as possible and furthering Riga's development as an important aviation transit hub between East and West," President Bertolt Flick said.
February 2006: AirBaltic (BAU) will eliminate business class (C) service on routes from Riga to Bergen, Hamburg, Helsinki, and Oslo from March 1. Service on the routes will be all-economy (Y) with buy-on-board, food and beverage.
It has announced several new routes from its 2 bases in Riga and
Riga to Bergen: 3x-weekly 737-500 service, starting on April 17;
Riga to Simferopol: 2x-weekly 737-500 service, starting on April 11;
Riga to Tbilisi: 2x-weekly 737-500 service, starting on May 2;
Vilnius to Budapest: 2x-weekly F 50 service, starting on March 28.
AirBaltic (BAU) will take delivery of an additional 737-500 this Spring, at which point (BAU) will operate 8 737-500s.
March 2006: AirBaltic (BAU) started 4x-weekly flights from Riga to Dusseldorf on March 1, using 737-500s. Aeroflot (ARO) and AirBaltic (BAU) announced a code share deal covering Moscow - Riga services. (ARO) operates 5x-weekly flights and (BAU) flies 6x-weekly.
(BAU) introduced a summer schedule, valid through October 28, featuring 9 new destinations available from its Riga and Vilnius bases. From Riga, it launched 6x-weekly flights to Warsaw and 3x-weekly service to Bergen on March 26. It will start 2x-weekly service to Simferopol on April 11, 2x-weekly flights to Tbilisi on May 2, 2x-weekly flights to Baku the following day, and 4x-weekly service to Liepaja, later in the month. Frequencies to 10 cities will increase and flights to London will land at Gatwick rather than Heathrow. From Vilnius, the addition of a 737-500 will help with service increases including 6x-weekly flights to Stockholm (launched March 26), 2x-weekly flights to Budapest, daily service to Warsaw, and 3x-weekly flights to Dusseldorf, both starting in June.
Code share with Azerbaijan Airways (AHY), Baku to Riga, on Mondays & Thursdays.
(BAU) reported a net loss of -€1.9 million/-$2.3 million for 2005, owing to a €4 million charge related to the return of Avro RJ70s. Excluding the charge, the Riga-based airline said it would have earned +€2.07 million, compared with a loss of -€1.2 million in 2004. Operating revenue totaled €120.4 million and passenger boardings reached 1.04 million.
"The revenue increase of +64% and passenger increase of +76% in 2005 compared with 2004, demonstrate the airline's remarkable growth," said airBaltic (BAU) President Bertolt Flick. "Our hub in Vilnius is developing very positively and is already profitable," he added.
Last year, (BAU) hired 200 new employees, bringing the workforce to 738. Internet sales represent 53% of total ticket sales and the company claims a 41% market share in Riga and 24.9% in Vilnius. With the addition of a 737-500 this spring, the fleet will consist of 8 737-500s and 9 F 50s.
April 2006: AirBaltic (BAU) launched 2x-weekly Riga to Simferopol service aboard 737-500s. (BAU) will launch 2x-weekly Riga to Tel Aviv service aboard 737-500s from June 5, becoming the only carrier in the Baltics or Scandinavia to offer direct service to Tel Aviv.
May 2006: AirBaltic (BAU) carried 113,723 passengers in April, +44% more than in the year-ago month. Load factor rose +12 points to 62% LF.
(SAS) Flight Academy and (BAU) signed a 5-year agreement covering pilot (FC) and cabin crew (CA) training on 737s and F 50s. The 737 training eventually will take place at a new center under construction at Riga International Airport.
(BAU) will inaugurate nonstop service from Riga to Tel Aviv on June 5th and operate 2x-weekly, departing Riga on Mondays & Wednesdays, and Tel Aviv on Tuesdays & Thursdays, using a 737-500.
Lufthansa (DLH) Systems said (BAU) will implement its ProfitLine/Yield Rembrandt as its future revenue management solution.
June 2006: AirBaltic (BAU) said it carried 119,389 passengers in May, +32% more than in the year-ago month. Load factor rose +5 points to 56% LF.
AirBaltic (BAU) will start 4x-weekly, Riga to Kaliningrad on July 2 using F 50s, code sharing with Pulkovo Aviation Enterprise (STG).
July 2006: Employees = 482.
August 2006: AirBaltic (BAU) will launch 4x-weekly on Mondays, Wednesdays, Fridays, & Sundays, Kaliningrad to Copenhagen service August 16 aboard F 50s. It is the 1st time (BAU) will operate flights from Russia to a 3rd country. (BAU) will start 3x-weekly Riga to Zurich flights from October 29 aboard 737-500s. It will be the 34th destination it serves directly from Riga.
September 2006: AirBaltic (BAU) flew 173 million (RPK)s in August, up +35.1% from the year-ago month. Capacity rose +25.8% to 246 million (ASK)s and load factor was up +4.9 points to 70.5% LF.
(BAU) will place its code on Uzbekistan Airways (UZB)'s 2x-weekly, Riga to Tashkent service beginning October 29.
(BAU) said it will launch a weekly flight from Riga to Hurghada and Sharm el-Sheikh by September 30, using a 737-500.
(BAU) President & (CEO) Bertolt Flick expects further dramatic growth for (BAU), projecting it will carry around 2.2 million passengers in 2007, up nearly +50% over 1.5 million this year.
(BAU) operates 9 F 50s, 7 737-500s and 1 MD-82 wet-leased from (SAS), and plans to exchange the 737-500s for a combined 12 737-300s and 737-400s by next year. Flick said he expects the carrier to need at least 30 airplanes to meet its growth needs and said it will decide on its future fleet within 2 years. "There will be absolutely no regional jets with (BAU), but a plane like a bigger Dash 8-Q400 would be interesting," he said.
(BAU)'s 2nd base in Vilnius produces about one-third of its revenues and is growing faster than primary base Riga. 2 737-300s will be based in the Lithuanian capital, Flick said, but he noted that "there is a problem of high taxes and fees, making Vilnius one of the most expensive airports in Europe."
He emphasized that (BAU)'s older strategies, such as using its low cost structure to operate low-fare flights for 47.2%-owner (SAS) on secondary routes out of Copenhagen, no longer are a focus. "We are growing very fast in our market and see strong demand coming up on point-to-point routes between the Baltic [region] and former Soviet Union states," he said.
Flick expects good financial results for 2006, improving on a -€3 million/-$3.83 million loss last year.
October 2006: AirBaltic (BAU)'s winter schedule will include a new Kaliningrad to Copenhagen flight and 3x-weekly services from Riga to Zurich and Gothenburg, starting October 29. A code share agreement with Uzbekistan Airways (UZB) will cover a 2x-weekly, Riga to Tashkent flight. (BAU) will increase Riga to Berlin Tegel frequency to 2x-daily, during the week, and add a Sunday flight. Riga to Tbilisi will operate 3x-weekly, flights to St Petersburg will increase to 11x-weekly, and Stockholm Arlanda service will operate 3x-daily.
November 2006: 1st 9 months = 1.16 billion passenger traffic +34.6% (RPK), 1.08 million passengers (+40.8%).
December 2006: AirBaltic (BAU) will operate a weekly (Saturdays) 737 Riga to Dubai flight from December 26 to March 24, its 1st long-haul route. The carrier signed a cooperation agreement with SN Brussels (DAT) to give Latvian passengers access to (DAT)'s 14-city African network via Brussels.
January 2007: 2006 had 1.54 billion (RPK)s passenger traffic (+32%); and 1.43 million passengers (+36.8).
AirBaltic (BAU) will launch 3x-weekly, Riga to Gomel service from March 25th using F 50s.
1st 737-300 (YL-BBL), ex-SkyEurope (SKP), with winglets - see photo.
February 2007: Starting April 26th, Riga to Stavanger, and Vilnius to Milan (MXP), to Rome (FCO), & to Zurich, using 737-500s.
1 737-33V (29332, YL-BBK), ex-SkyEurope (SKP), Oak Hill leased delivery.
May 2007: Started international services from Liepaja.
July 2007: Servisair said airBaltic (BAU) awarded it "a significant multiyear" ground handling contract at London Gatwick.
September 2007: AirBaltic (BAU) will launch 2x-weekly flights from Riga to Tashkent, and a new 3x-weekly Riga to Oulu service starting with the winter schedule.
737-33A (27454, YL-BBI), Pembroke (PEB) leased.
November 2007: 1st 6 months = 1.75 billion (RPK)s (+50.5%) traffic; 1.5 million passengers (+39%).
AirBaltic (BAU) will launch 3x-weekly, Riga to Yerevan and 2x-weekly, Riga to Almaty service next summer. (BAU) will launch 3x-weekly, Vilnius to Paris Charles de Gaulle service on March 31 using 737-500s.
December 2007: (ILFC) (ILF) announced a leasing deal with airBaltic (BAU) for 2 757-200ERs powered by (RB211-535E4)s to be delivered next spring, under 8-year leases.
January 2008: 2007 statistics: 2.32 billion (RPK)s passenger traffic +50.7%; +44.3% capacity (ASK)s; +2.7 load factor for 63.3% LF.
SEE ATTACHED CHART TO SELECTED OPERATORS - "BAU-2007-STATS."
AD Aerospace said (BAU) selected its CabinVu-123 Cockpit Door Monitoring System for its 737s and 757s.
March 2008: AirBaltic (BAU) will launch 3x-weekly, Riga to Chisinau on April 1, using F 50s.
The (SAS) Group said it will receive "slightly more" >SEK1 billion/$163.3 million in cash and credit toward new airplane purchases in settlement with Bombardier and Goodrich (BFG) over the Dash 8-Q400 landing gear incidents that led the airline to retire its 27 Dash 8-Q400s last fall. As part of the settlement, (SAS) ordered 13 firm CRJ-900 NextGens, worth $474 million and 14 Dash 8-Q400 NexGens worth $356 million. It optioned a further 17 CRJ-900s and 7 Dash 8-Q400s. Delivery of the firm airplanes begins this fall and continues through 2011. Bombardier (BMB) valued the firm orders at approximately $883 million, which could increase to $1.75 billion, if all options are exercised. The CRJs will be delivered to (SAS) Scandinavian Airlines and Estonian Airlines (ENA), while the Dash 8-Q400s will go to subsidiaries, Wideroe and (BAU). "We are very satisfied with the settlement with Bombardier," (SAS) President & (CEO) Mats Jansson said. "The firm order for 27 airplanes will bring a rejuvenated premium product to our customers. The CRJ-900 and Dash 8-Q400 NextGen airplanes are well-suited to our operations in Northern Europe."
(BAU) will undergo the largest fleet expansion in its history owing to parent (SAS) Group's contract with Bombardier. (BAU) will take delivery of at least 8 Dash 8-Q400 NextGen airplanes starting next year and will hold options for four more. The new airplanes will replace F 50s. (BAU) also plans to add two 757-200s and three 737-300s this year.
SEE ATTACHED PHOTO - "BAU-757-MAR08."
April 2008: From April 30th, 3x-weekly, Riga to the Swedish city of Norrkoping, using a F 50 turboprop. This service to this regional center brings its Scandinavian connections to 11. It already flies to Alesund, Bergen, Billund, Helsinki, Copenhagen, Kuopio, Oslo, Oulu, Stavanger, and Stockholm.
May 2008: Latvia's national airline, airBaltic (BAU) operates services from Riga to destinations throughout Europe, western Russia, the (CIS), and the Middle East. Additional European services link Liepaja with three cities, and Vilnius (Lithuania), with 19 destinations. Direct flights are also flown between Copenhagen and Kaliningrad. Worldwide connections are available through (BAU)'s strategic partner, Scandinavian Airlines (SAS) under the concept "Well connected with (SAS)." A single domestic route is also served between Riga and Liepaja.
Employees = 978.
Parent organization/shareholders: Latvian government (52.6%); Scandinavian Airlines (SAS) Group (47.2%); & Transaero (TRX) (0.2%).
Alliances: Scandinavian Airlines (SAS).
Main Base: Riga International Airport (RIX).
Hubs: Copenhagen Kastrup airport (CPH); & Vilnius International airport (VNO).
Domestic, scheduled destinations: Riga; & Liepaja.
International, Scheduled Destinations: Barcelona; Berlin; Brussels; Copenhagen; Dublin; Hamburg; Helsinki; Istanbul; Kiev; London; Manchester; Milan; Minsk; Moscow; Munich; Oslo; Palanga; Paris; St Petersburg; Stockholm; Tallinn; Vienna; & Vilnius.
August 2008: AirBaltic (BAU) will launch daily, Riga to Amsterdam on October 26 aboard a 737-500. It also reached a code share deal with Brussels Airlines (DAT)/(EBA) under which the Belgian carrier will place its code on (BAU)'s Riga to Brussels service beginning August 4. (BAU) said it will launch its 1st intercontinental flight on October 24 with 2x-weekly, Riga to Dubai service aboard 757-200s.
September 2008: AirBaltic (BAU)will launch flights from Riga to Amsterdam (daily), Hannover (5x-weekly), Tampere (2x-daily), and Dubai (2x-weekly) on October 26. It will offer 49 routes from Riga and 14 from Vilnius during the winter schedule.
November 2008: Skyways Aviation concluded 5 F 50 lease transactions with airBaltic (BAU) on behalf of Largus Aviation. Largus purchased 3 airplanes currently operated by (BAU) and extended leases by 4.5 years each. The remaining 2 are operated by Sweden's Skyways Express and will be released this month and in April.
December 2008: (SAS) Group's restructuring took a significant step forward with announcement of the sale of its airBaltic (BAU) stake and a new majority investor in Spanair (SPP). (BAU), in which (SAS) holds 47.2%, will be sold to the airline's management for LAT14 million/$27.5 million in cash by January 31, (SAS) announced, resulting in a SEK175 million/$22.5 million capital gain for the Scandinavian company. "This divestment is in line with our strategy not to maintain minority holdings in our airlines. We are pleased to have built (BAU) to a strong Baltic airline and we are confident that the new owners will continue to develop the company in a positive direction," (SAS) President & (CEO) Mats Jansson said. It announced its intention to divest (BAU) over the summer.
The Latvian government turned down the opportunity to pay LAT47 million for the stake. Latvia owns the other 52.8% of (BAU). (BAU) will continue to cooperate with (SAS) on flights to/from Riga, (CEO) Bertold Flick said.
(MNG) Technic (IST) reached a 5-year Maintenance Repair & Overhaul (MRO) deal with (BAU) to provide "C" checks on 737s. The contract also covers (BAU)'s technical training requirements.
January 2009: Latvian national carrier, airBaltic (BAU) could launch its 1st transatlantic flights during 2009, according to the country's Minister of Transportation & Communication, Einars Shlessers. Following the waiving of visa restrictions for Latvians to travel to the USA, the Minister has suggested that a service up to 4x-weekly could be established to North America before the end of 2009. (BAU) executives have remained tight-lipped on the proposed expansion, with (CEO) Bertolt Flick publicly stating that any growth will be subject to an analysis of traffic demand. (BAU)'s majority shareholder is the Latvian Government and so it could face ministerial pressure to establish the connection.
February 2009: The (SAS) Group announced the completion of its sale of a majority share in Spanair (SPP) and its entire stake in airBaltic (BAU). A consortium of Spanish investors led by Consorci de Turisme de Barcelona and Catalana d'Inciatives acquired an 80.1% stake in (SPP) for €1/$1.31, leaving (SAS) with the remainder. (SAS) took a -SEK712 million/-$87.9 million loss on the deal that will reflect on its 4th-quarter balance sheet. It will convert €20 million in existing loans to (SPP) into equity and repay its external loans of €18 million, while €99 million of existing interest-bearing indebtedness to (SAS) will remain outstanding and be amortized in line with (SPP)'s future cash flow generation. (SAS) will continue to lease 18 airplanes to (SPP). Its 47.2% holding in (BAU) was sold to airline management. "The transaction has been completed and payment in respect of the shares has been received in accordance with the announced terms," (SAS) said.
(BAU) and Rossiya (SDM) expanded their code share agreement to cover (BAU)'s Riga to St Petersburg, Riga to Kaliningrad and Kaliningrad to Copenhagen flights.
(BAU) will launch 2x-weekly, Riga to Dushanbe flights on June 1 aboard a 737. Dushanbe, the capital of politically volatile Tajikistan, is located just north of Afghanistan. The 5-hour plus 737 flights begin in June, at which point (BAU) will be the only European Union (EU) airline flying to Tajikistan. (BAU) is seeing a big boost in connecting traffic from Vilnius following the collapse of Fly-(LAL) (LIJ), the Lithuanian carrier. In January, the Vilnius to Riga route was (BAU)’s busiest, followed by Riga to Berlin and Riga to Copenhagen. Connections from Tallinn are also increasing as Estonian Air (ENA) reduces capacity.
April 2009: AirBaltic (BAU) will commence 4x-weekly, Riga to Linkoping service on April 30 aboard a 737.
May 2009: AirBaltic (BAU) will launch service from Riga to Kaunas (2x-daily on June 4), Geneva (3x-weekly on July 1) and Turku (4x-weekly on July 7).
(BAU) has renovated its Business (C) Lounge at its Riga International airport base. The modernized facility affords excellent views across the main apron and runway,
SEE PHOTO - "BAU-RIGA LOUNGE-MAY09."
June 2009: AirBaltic (BAU) will begin service from Riga to Dushanbe (2x-weekly on June 1), Geneva (3x-weekly on July 1), Turku (4x-weekly on July 7) and Kaunas (13x-weekly on June 4).
July 2009: AirBaltic (BAU) (CEO) Bertolt Flick will be 1 of just a few airline heads to regard 2009 as a success, despite the fact that the "whole Baltic market has been affected by the [economic] crisis," he said, because (BAU) has "found our niche with less competition and is expecting a very profitable year." (BAU) was forced to evolve from a point-to-point carrier supporting (SAS) Group hubs into a network airline. "Of course we didn't know if we would have success with this new model. We recognized the 1st signs [of the downturn] in the autumn and realized that we would have to change step by step," Flick said.
Most of (BAU)'s direct services from its 2nd base at Vilnius were dropped and Riga became a hub. "Today, 50% of our passengers are transferring," he said. "It is easier to handle a point-to-point carrier than a transfer airline, but we have had success. We are strong in markets like the former Soviet Union, the Baltics and smaller cities in Scandinavia. We do not have much competition in those places." A competitor, FlyLAL Lithuanian Airlines (LIJ), ceased operations 6 months ago.
"There are many countries in this part of the world we are not serving now," Flick said. He sees (BAU)'s soon-to-be-delivered Dash 8-Q400 NextGens as perfect for destinations like Ukraine or Uzbekistan. The airplane will operate a new Riga to Pskov service starting in September.
(BAU)'s 8 incoming turboprops will replace 3 737-500s. (BAU) plans to operate its 11 F 50s through 2012. 16 737-300s/-500s and 2 757-200s comprise the remainder of its current fleet. "The biggest challenge for us is the total downturn in our home market, Latvia, where we produced 47% our passengers [before the crisis], but now the number is just 17%," Flick said. In the 1st half of 2009, total passenger numbers climbed +8% year-over-year to 1.2 million. (BAU) expects about 3 million this year.
Asked if the airBaltic (BAU) brand was associated with the hub-and-spoke model, he said, "I believe we have a long way ahead of us, but we are slowly getting closer to carriers like Malev (HGA) [Hungarian Airlines] and (LOT) [Polish Airlines]. (BAU) will continue to cooperate with former shareholder (SAS) Group but has no plans to align with an alliance in the near future, he said.
(BAU) launched 4x-weekly, Riga to Tartu service and will start 4x-weekly, Riga to Turku flights aboard F 50s. (BAU) will launch daily, Riga to Frankfurt service September 17 aboard a 737.
August 2009: AirBaltic (BAU) (CEO) Bertold Flick confirmed that the Latvian government is providing financial assistance to (BAU), but he declined to comment on media reports that (BAU) is on the verge of bankruptcy. "It is true we [are getting] a capital increase from the government," he said. "I cannot name a detailed sum at the moment, but it will be around €40million/$56.9 million, which will be transferred to us this year." Latvian newspaper "Diena" reported that the government in Riga plans to rescue (BAU) from bankruptcy by increasing its shareholding.
Flick said he is not commenting on the report but insisted that the airline is performing reasonably well. Last month he said that (BAU) was "expecting a very profitable year." "(BAU) is doing much better this year than we expected," he said, adding that it has benefited from capacity cuts and route reductions by other carriers such as (CSA) Czech Airlines and (LOT) Polish Airlines. "It is good for us when others leave," he said. He also noted that (BAU)'s yield has increased this year in contrast to the industry trend of falling yields but did not provide numbers.
September 2009: AirBaltic (BAU) said it "very much appreciates and welcomes" a meeting between the transport ministers of Latvia, Lithuania and Estonia and their discussions regarding a pan-Baltic flag carrier, while claiming that it already fits that profile. (BAU) plans to expand its Tallinn operation with flights to Turku beginning October 1 and is "prepared to become involved in future negotiations," according to President & (CEO) Bertolt Flick. "If (BAU)'s capital base is expanded, (BAU) will expand even more rapidly than before in the Baltic states," he said.
(BAU)'s 2 shareholders, the Latvian government (52.6%) and a company owned by Flick (47.2%), are in negotiations to increase (BAU)'s capital. Latvia reportedly is proposing to boost capital gradually over three years to LVL30 million/$61.9 million, with each shareholder committing LVL2 million this year. Late last month, (BAU) said it remained on track to post a profit of around +LVL12 million this year, while strongly denying rumors that it was on the verge of bankruptcy following last year's loss. It carried 1.8 million passengers in the 1st 8 months of 2009, up +6% year-over-year. Load factor rose +6 points to 68% LF.
(BAU) is launching its own frequent-flyer program called "BalticMiles," which is set to go into effect on October 1. (BAU) left the (SAS) Group in January.
(BAU) launched 2x-weekly, Riga to Pskov service aboard an F 50.
Lufthansa Systems will provide its Lido (OC) flight planning solution to (BAU) under a 5-year deal. Implementation will be completed in the 2010 1st quarter.
October 2009: AirBaltic (BAU) launched daily service between Turku and Tallinn and will launch 4x-weekly service from Lappeenranta to Tallinn and Riga November 12 aboard 737s.
SEE ATTACHED CELEBRATION - "BAU-2009-11 NEW ROUTES."
(BAU) named Vigo Legzdins its new Chairman. Legzdins is also Chairman of Latvian Roadworks and was previously State Secretary of the Ministry of Transportation and Head of its Investment & Transit Policy Department.
November 2009: AirBaltic (BAU) transported 258,513 passengers in October, up +10% year-over-year. Load factor rose +8 points to 70% LF.
(BAU) will start charging a €5/$7.36 fee per passenger for airport check-in on November 16. Internet check-in will remain free of charge. The airport fee will not be levied against loyalty program members, passengers with reduced mobility, children younger than 12 and those departing from airports at which Web check-in is unavailable.
December 2009: AirBaltic (BAU) transported 207,106 passengers last month, a +9% increase year-over-year. Load factor rose +7 points to 65% LF.
(BAU) concluded 1-year agreements with the Austrian and Swiss governments for provision of flights for government employees to/from >60 destinations. (BAU) signed similar deals with the Danish, Finnish, and German governments this year.
(BAU) launched 737 service from Vilnius to Paris Charles de Gaulle (3x-weekly) and Munich (4x-weekly) and plans to begin flying to Berlin Tegel (3x-weekly from today), Amsterdam (6x-weekly from January 4) and Rome Fiumicino (3x-weekly from January 11).
(BAU) became the latest Low Cost Carrier (LCC) to charge passengers utilizing airport check-in. The Euro 5 fee was introduced for all Economy (Y) travellers, although members of its BalticMiles loyalty program, and those with reduced mobility and children up to the age of 12 are exempt from the surcharge.
January 2009: AirBaltic (BAU) said it expects to report a full-year pre-tax profit +LVL14 million/+$28.3 million, making it "the only profitable airline in Europe that is majority-owned by the state." In 2008, (BAU) posted a pre-tax loss of -LVL30.4 million. "Due to the strong development of transfer traffic, it was possible to maintain the level of passenger revenue. The profit has been greatly enhanced by the sale of different services: hotels, insurance, car rentals, etc," President & (CEO) Bertolt Flick said. Total 2009 revenue rose +1.8% to LVL206.4 million.
Passenger boardings increased +6% to 2.8 million, driven by +30% growth at its Riga base. Load factor gained +6 points to 68% LF as the number of flights fell -4%. It carried 216,051 passengers in December, up +12% year-over-year, while load factor improved +9 points to 66% LF. Flick expects a further downturn in passenger traffic throughout the Baltic states, with no recovery in sight prior to the 2011 summer. To counter the grim environment, (BAU) said it will launch at least 9 new routes this year "to further strengthen our transit products." New service will focus on "niche markets" in Scandinavia and the (CIS), where it faces less competition, Flick said. Meanwhile, it will be "closely looking" at cost reductions. He also renewed his call for a new terminal at Riga International, emphasizing that "construction has to start as soon as possible if Riga Airport is willing to accommodate any growth beyond 2011."
(BAU) will launch 2x-weekly, Vilnius to London Gatwick flights on March 4 and 2x-weekly service from Riga to Amman on June 1 and Beirut on June 2.
(BAU) was selected for the Air Transport World (ATW) magazine "Phoenix Award," which recognizes airlines that have gone through a life-changing transformation. The editors cited (BAU)'s successful decision to change its business strategy from a focus on point-to-point traffic in favor of a network model making Riga a connecting hub between East and West. Since making the transition, (BAU) has experienced significant improvements in traffic and financial performance, including a +33% rise in passengers at its home airport in the 1st 9 months of 2009.
The Association of European Airlines (AEA) admitted airBaltic (BAU), Aegean Airlines (CRM) and Montenegro Airlines (MNO) as members. It now comprises 36 carriers. The (AEA) also announced that British Airways (BAB) (CEO) Willie Walsh will serve as the organization's Chairman in 2010, succeeding Croatia Airlines (CRH) President & (CEO) Ivan Misetic.
(BAU) will launch 737 service from Vilnius to Dublin (4x-weekly on March 29), to Hamburg (3x-weekly on March 30), to Manchester (2x-weekly on March 31) and to Oslo Gardermoen (4x-weekly on May 17). A 4x-weekly, Riga to Vaasa to Umea flight begins March 29, increasing to daily on May 31. (BAU) will launch 3x-weekly, Riga to Manchester service March 29 aboard a 737.
February 2010: AirBaltic (BAU) will launch 3x-weekly, Riga to Tehran flights on June 8 aboard a 737.
Aerosvit Airlines (UKA) has entered into a code share agreement with (BAU) for the Kiev Borispol to Riga route operated by (BAU) and connections via Riga.
(BAU) took over facilities and equipment at Riga International formerly belonging to Oxford Aviation Academy (OAA) and is establishing "airBaltic Training," which President & (CEO) Bertolt Flick said "is crucial to meet the growing needs of (BAU) and to generate additional revenue by providing flight crew (FC) training services to other airlines." (BAU) operates 10 737-500s, 8 737-300s, 2 757-200s and 11 F 50s and plans to open at least 9 new routes from Riga in 2010. According to the (OAA), the Riga facility houses 1 737-300 Full Flight Simulator (FFS), a multipurpose crew trainer for evacuation and fire training, 737 and F 50 door trainers and 7 classrooms.
March 2010: AirBaltic (BAU) will open a base at Tallinn on June 1, adding it will unveil additional details on March 31 during the opening ceremony of its new direct Tallinn to Tampere service. It will launch 5x-weekly, Stockholm Arlanda to Oulu flights on June 1.
(BAU) acquired full ownership of a cargo handling business at Riga International and will operate it under a new "BalticCargo" brand. It will offer "a full spectrum of cargo handling services of passenger airplanes and freighter airplanes, as well as cargo handling facilities. Latvia is currently the fastest-growing passenger aviation market in the European Union (EU). In our view, the cargo market has the potential to grow in a similar fashion, given Riga's favorable geographic location and the airport's expanding network of flights," (BAU) Bertolt Flick said.
April 2010: AirBaltic (BAU) next month will start evaluating an order for up to 30 new narrow bodies to replace its current fleet comprising 10 737-500s, 8 737-300s and 2 757-200s, VP Corporate Communications Janis Vanags confirmed. The order will be for either 737s or A320 family airplanes, he said, emphasizing that (BAU) wants to operate a single narrow body airplane type. The new airplanes will be acquired through a mix of operating and financial leases. "The 1st new narrow bodies might join the fleet [as soon as] the end of this year," he said, adding that all of the new airplanes would be scheduled to arrive by the end of 2013.
Vanags refrained from commenting on when the carrier will start taking delivery of new Dash 8-Q400s, of which it has eight on firm order and 4 options. However, a company source said that the 1st is scheduled to arrive in Riga in a couple of weeks and airBaltic (BAU) should receive all 8 of them by year end. It presently operates 11 F 50s, which will be phased out by 2013.
Vanags also confirmed that the airline's shareholders have reached a long-awaited agreement to increase its capital by +LVL30 million/+$57.9 million to support further growth and fleet renewal. The Latvian state, which holds 52.6% of the company, will inject +LVL15.6 million and airBaltic (BAU) President & (CEO) Bertolt Flick's Baltic Aviation Systems will invest LVL14.4 million.
(BAU), winner of Air Transport World (ATW)'s "2010 Phoenix Award," reported a 2009 profit of +LVL14 million. In the 2010 1st quarter, it increased passengers carried +25% compared to the year-ago period to 624,191. The number of flights operated rose +21% during the quarter and load factor lifted +2 points to 62% LF.
May 2010: AirBaltic (BAU) transported 211,503 passengers in April, a -3% decline year-over-year. Load factor fell -2 points to 63% LF. During the 1st 4 months, it transported 835,694 passengers, a +16% year-over-year improvement. Load factor for the 4-month period remained flat at 62% LF.
(BAU) will launch 3x-weekly, Riga to Belgrade 737 service on May 5.
Dash 8-Q402 (4289, YL-BAE), delivery.
June 2010: AirBaltic (BAU) transported 295,809 passengers in May, a +29% increase year-over-year. Load factor rose +3 points to 69% LF.
(BAU) launched 5x-weekly service from Stockholm Arlanda to Oulu and Tallinn aboard an F 50 and 2x-weekly Riga to Amman service aboard a 737. (BAU) launched Riga service to Beirut (2x-weekly) and Madrid (4x-weekly) aboard 737s.
(BAU) and (TAV) Airports Holding signed a Memo of Understanding (MOU) to become joint venture (JV) partners for the possible development, construction and operation of a new passenger terminal at Riga International. The (JV) would be on a 50:50 shareholding basis. AirBaltic (BAU) has lobbied for a new terminal able to handle 7 million passengers by 2014, which reportedly would require an investment of >€92 million/$127.5 million from the private sector.
July 2010: AirBaltic (BAU) launched 3x-weekly, Riga to Lulea flights.
August 2010: AirBaltic (BAU) earned a $22 million net profit on $414 million in revenues for 2009.
(BAU) President & (CEO) Bertolt Flicksaid said this year's net profit was despite the volcanic ash-related airspace closures in April and an uncertain economic climate. “2010 is not the easiest year, but we’re doing okay. We’re on target,” Flick said in Riga. AirBaltic (BAU), Air Transport World (ATW)'s "2010 Phoenix Award" winner, recently launched >20 new routes. “We seized market opportunities,” he said, dismissing remarks from some that (BAU) is expanding too rapidly. “Several of the new routes were profitable after 1 month.”
(BAU) carried 1.5 million passengers in the 1st 6 months of 2010, up +22% year-over-year, as the number of flights it operated rose +27% compared to the 2009 1st half. Load factor remained stable at 65% LF. “Yield is lower than last year, but (CASK) also decreased, mainly owing to higher airplane utilization and overall productivity gains,” Flick added. He confirmed that (BAU) is pursuing talks with Finncomm Commuter Airlines about a commercial cooperation, but is no longer contemplating taking a majority stake or an outright purchase of the Finnish carrier. Privately held, Finncomm has provided feeder services for Finnair (FIN) since 1998, but the relationship between the carriers has been tense in recent months with Finncomm discontinuing several loss-making routes. (FIN) cited concerns about its future with Finncomm in announcing its wet-lease deal with Flybe (BEE) earlier this month.
The envisaged cooperation with Finncomm is part of AirBaltic (BAU)’s “Finland focus,” which it launched 2 years ago and “is paying off,” according to Flick. It now serves 10 airports in Finland with >20 routes, including several domestic routes. “For people traveling between Finland and Western Europe, it makes no difference if they fly over Riga or Helsinki, but owing to our low costs, we can offer lower fares than Finnair (FIN)," he said.
(BAU) transported 340,586 passengers in July, a +24% increase year-over-year. Load factor dipped -1 point to 76% LF.
September 2010: Air Baltic (BAU) has taken delivery of its 1st 3 Dash 8-400s and has temporarily wet-leased a MD-87 from (MD) Airways and 3 Fokker 100s from Blue Line (4Y/Paris CDG) and Trade Air (8P/Zagreb) to cover for other Dash 8-400s that have not yet been delivered. It continues its strategy to build up its so called "North Hub" in Riga and expansion into Estonia and Finland:
Oulu to Stockholm Arlanda: 5x-weekly Fokker 50 service started on June 1;
Riga to Arkhangelsk: 2x-weekly 737-500 service on July 3;
Riga to Kittilä: 2x-weekly Dash 8-400 service starting on November 11;
Riga to Lappeenranta - Kuopio: 4x-weekly Dash 8-400/Fokker 50 service started on May 3;
Riga to Lappeenranta to Kuusamo: 3x-weekly Dash 8-400/Fokker 50 service started on March 31;
Riga to Lulea: 3x-weekly Dash 8-400/Fokker 50 service started on July 2;
Riga to Tampere to- Kittilä: 2x-weekly Dash 8-400 service starting on November 10;
Riga to Tampere to Kuopio: 3x-weekly Dash 8-400/Fokker 50 service started on March 31;
Riga to Tampere to Rovaniemi: 4x-weekly Fokker 50 service started on May 3;
Riga to Visby: 3x-weekly seasonal Fokker 50 service started on June 4;
Tallinn to Stockholm Arlanda: 5x-weekly Fokker 50 service started on June 1;
Tallinn to Turku to Oulu: 4x-weekly Fokker 50 service started on May 13;
Vilnius - Dublin: 5x-weekly 737-300/-500 service resumed on March 29;
Vilnius - Tallinn: 2x-daily Fokker 50 service resumed on March 28;
(BAU) has however, given up its Vilnius to Amsterdam route again on June 6 and gave up its Riga to Belgrade route on August 30. It has also cut its Riga to Pskov link, citing lack of demand as the main reason.
(BAU) has signed a Memorandum of Understanding with Turkish airport operator (TAV) to enter into a joint venture to build a new terminal in Riga able to handle up to seven million passengers.
(BAU) has also announced plans to replace its fleet of 8 737-300s, 9 737-500s and 2 757-200s by new 737NG or A320 family airplanes by 2013 when it also wants to have its Fokker 50 fleet phased out. (BAU) is then planning to increase its medium haul fleet from 19 to approximately 30 by 2014. (BAU) is reportedly in talks with Finncomm Airlines about a possible acquisition of the Finnish regional carrier. It has started code sharing on new Tarom (TRM) services linking Riga and Bucharest Otopeni 4x-weekly.
October 2010: AirBaltic (BAU) will launch 3x-weekly, (Tuesdays, Thursdays, and Fridays) Riga to Moscow Domodedovo service on December 2 aboard a 737. (BAU) will launch daily Riga to Milan Linate service on October 31 aboard a 737.
(BAU) is laying claim to the distinction of becoming the 1st airline in Europe to introduce Apple iPads for in-flight entertainment (IFE). (BAU) in a statement says iPads will become available to airBaltic (BAU) passengers in "the coming season", offering customers "movies, cartoons, music, games, or daily news from electronic newspapers".
(BAU) serves >80 destinations from its home base at North Hub Riga, Latvia. (BAU) "is the 1st airline in Europe and the 2nd airline in the world to introduce Apple iPad for its customers", says (BAU) Chief Commercial Officer (CCO) Tero Taskila.
In June 2009, (ATI) reported that Bluebox had secured airBaltic (BAU) as a roll-out customer for the latest model of its portable (IFE) unit, the "Bluebox Lite", which is manufactured by Samsung. It is not immediately clear if (BAU) is tapping Bluebox for its iPad-based portable (IFE) devices.
The Qantas Group's low-cost subsidiary, Jetstar Airways (IMU) made headlines in June when it announced plans to become the 1st airline to rent iPads as in-flight entertainment (IFE) under a special partnership with BlueBox and content service provider Stellar Inflight. But Jetstar (IMU) is not alone in its intention to turn the popular touchscreen computer into portable (IFE). Malaysia Airlines (MAS), for example, plans to introduce iPads to passengers.
November 2010: AirBaltic (BAU) will operate seasonal winter flights from Riga to Kittila Levi, Vaasa, Kuopio, Rovaniemi, Amman, Beirut, Umea, and Moscow Domodedovo. (BAU) will also launch Tampere routes to Kittila Levi and Rovaniemi as well as Vaasa to Umea service and Tallinn to Vilnius service. (BAU) will increase winter frequencies to Bergen (4x-weekly), Stavanger (4x-weekly), Brussels (11x-weekly), Gothenburg (3x-weekly), Kaliningrad (13x-weekly), Helsinki (35x-weekly), Tbilisi (4x-weekly), Vienna (6x-weekly) and Zurich (4x-weekly).
December 2010: AirBaltic (BAU) has finalized a sale and leaseback agreement with Nordic Aviation Capital (NAC) covering (BAU)'s entire fleet of Bombardier Dash 8-Q400 NextGen turboprops. The deal, valued at $212 million, covers 8 airplanes. 5 of them are now being acquired from Bombardier by (NAC), with the three others sold back to the lessor by (BAU), which is already operating those airplanes. The deal for the 3 airplanes (BAU) had already taken is valued at $79.5 million. Delivery of the 5 outstanding Dash 8-Q400s is planned soon.
In announcing the deal, (BAU) Chairman Martin Moller notes it is the largest transaction of its kind for (BAU).
January 2011: AirBaltic (BAU) will increase daily Fokker 50 service to Riga from Turku and Oulu to 2x-daily on January 31. (BAU) reached a cooperation agreement with Turkish Airlines (THY) under which it will offer connections to 11 destinations in Turkey, and 20 in the Middle East and Africa. (BAU) will launch 4x-weekly, Fokker 50 Riga to Gdansk service on April 18 and a 2x-weekly, Oulu to Tromso Bombardier Dash 8-Q400 service on April 29.
(BAU) launched an iPhone application, enabling users to check real-time flight status, find the shortest connection times and follow information on departure, arrival and flight disruptions on their iPhone or iPad. The "app" is available in nine languages: English, Latvian, Russian, Lithuanian, Estonian, Norwegian, Finnish, Swedish, and German.
February 2011: AirBaltic (BAU) reached a code share agreement with Transaero (TRX) under which it will offer connections via Moscow Domodedovo to destinations in Russia, Central Asia, and the Far East.
(BAU) will increase service from Riga to Lappeenranta (to 2x-daily on March 27) and Vaasa (to 7x-weekly on June 2), also increasing Vaasa to Umea to 7x-weekly on June 2.
March 2011: AirBaltic (BAU) announced it will cancel Vilnius service to Dublin, London, Rome, and Paris for the summer season, beginning March 27 "as the new market entrants in Lithuania have created identical products, resulting in overlapping of routes and overcapacity," it said.
(BAU)'s aging fleet, which includes 14 737-300/-500 airplanes, creates challenges in managing rising fuel prices, President & (CEO) Bertolt Flick said. "It is clear that we need a more modern fleet," he said. He noted that (BAU) has replaced older 737s with Bombardier Dash 8-Q400 turboprops on certain routes, a move Flick believes will yield $40 million in fuel cost savings annually. In addition to the 737-300/500s, (BAU)'s fleet comprises eight Dash 8-Q400s, 10 Fokker F 50s and 2 757-200s. "The future fleet will be based on 2 types," either the 737NG or the A320 and the Dash 8-Q400, Flick explained. A fleet renewal decision will be made by this summer at the latest, he added.
(BAU) is aiming for new airplane deliveries to start by the end of 2013/early 2014. Financing will be aided by a potential investor or via an Initial Public Offering (IPO), Flick said, adding, "Before we decide the form of financing, first we need to decide the airplane type. We're talking about [placing orders for] 24 airplanes."
Flick said that "to reach an optimal critical mass, (BAU)'s future fleet could grow to 40 airplanes. This could be ideal for us."
(BAU) also is facing capacity constraints at its Riga hub. "We need urgently a terminal extension," Flick said, asserting that airport authorities have not adequately planned for future growth. Two-thirds of (BAU)'s total passengers either fly to/from Riga or transfer airplanes there. (BAU) expects +20% growth in passengers at Riga this year compared to 2010.
Flick said that (BAU) "must pay several times higher fees [at Riga] than Ryanair (RYR) based on a contract which was established in 2004" between the airport and (RYR), and asserted this adds +€1 million/+$1.4 million in annual costs to (BAU)'s ledger.
(BAU) is 52% state-owned and Flick holds 47%. He said additional investment from the Latvian government is unlikely. It transported 3.2 million passengers in 2010 and Flick predicts passengers carried will rise +15% in 2011 compared to the previous year.
April 2011: AirBaltic (BAU) will launch weekly, 737 Riga to Bari service on June 4.
(BAU) beginning April 26, will offer a vacant adjacent seat to its business class (C) passengers flying Bombardier Dash 8-Q400 NextGen and Fokker 50 airplanes. It says it plans to make "further improvements" to its business class (C) travelers by offering the service at "more attractive prices" to those who book early.
May 2011: As Latvia's national airline, airBaltic (BAU) operates services from Riga to destinations throughout Europe, western Russia, the CIS, and the Middle East. Additional European services link Liepaja with 3 cities, and Vilnius (Lithuania), with 19 destinations. Direct flights are also flown between Copenhagen and Kaliningrad. Worldwide connections are available through strategic partner (SAS). A single domestic route is also served between Riga and Liepaja.
Employees = 917.
(IATA) Code: BT - 657. (ICAO) Code: BTI - (Callsign - AIRBALTIC).
Parent organization/shareholders: Latvian government (52%); Bertolt Flick, (BAU) (CEO) (47%); & Transaero (TRX) (1%).
Alliances: Aeroflot Russian Airlines (AREO); AeroSvit Airlines (UKA); Air Astana (AKZ); Armavia (ARZ); Austrian Airlines (AUL); Azerbaijan Airlines (AHY); Belavia Belarussian Airlines (BLV); Brussels Airlines (DAT)/(EBA); Donavia (DAU); Donbassaero (UDC); Georgian Airways (GEI); (KD) Avia (KGD); Malev (HGA); Moldavian Airlines (MDV); Rossiya Airlines (SDM); (S7) Airlines (SBR); Scandinavian Airlines (SAS); Spanair (SPP); & Uzbekistan Airways (UZB).
Main Base: Riga International Airport (RIX).
Hubs: Copenhagen Kastrup airport (CPH); Tallin (Estonia); & Vilnius International airport (VNO).
Domestic, scheduled destinations: Riga; & Liepaja.
airBaltic (BAU) currently offers flights to and from Aalesund, Almaty, Amman, Amsterdam, Arkhangelsk, Athens, Baku, Barcelona, Bari, Beirut, Belgrade, Bergen, Berlin, Billund, Brussels, Budapest, Bukharest, Chisinau, Copenhagen, Dubai, Dublin, Dushanbe, Düsseldorf, Frankfurt, Gdansk, Geneva, Gothenburg, Hamburg, Hannover, Helsinki, Istanbul, Kaliningrad, Kaunas, Kiev, Kittila, Kuopio, Kuusamo, Lappeenranta, London, Lulea, Madrid, Milan, Minsk, Moscow, Munich, Nice, Odessa, Oslo, Oulu, Palanga, Paris, Riga, Rome, Rovanniemi, Simferopol, St Petersburg, Stavanger, Stockholm, Tallinn, Tampere, Tartu, Tashkent, Tbilisi, Tel Aviv, Tromso, Turku, Umea, Vaasa, Venice, Vienna, Vilnius, Visby, Warsaw, Yerevan, and Zurich.
AirBaltic (BAU) will launch daily, Vilnius service to Stockholm Arlanda and Berlin Tegel on June 7 in cooperation with its partner, Skyways. (BAU) launched 4x-weekly Riga to Budapest service.
(BAU) will increase service from Riga (RIX) to Warsaw (3x-daily) and Gdansk (6x-weekly), and will launch 2x-weekly, (RIX) to Bari service in July.
June 2011: AirBaltic (BAU) will operate weekly Riga to Tenerife South 757 service starting June 9.
(BAU) announced it has begun selling discounted tickets to passengers during flight, claiming that by selling exclusively onboard it “secures discounted future flights to loyal customers.” Tickets purchased onboard are in the form of a voucher and can be given as a gift. The tickets will be on sale throughout June on all (BAU) flights.
July 2011: AirBaltic (BAU) announced it will retire its Fokker F 50 fleet this winter season to speed up its fleet modernization process. The Fokker 50s originally were scheduled to operate until 2013. Last year, (BAU) introduced Bombardier Dash 8-Q400s to its fleet.
"In the past 12 years, the Fokker 50 has served (BAU) very well," said President & (CEO) Bertolt Flick. "However, the new reality of increasing fuel prices, mounting cost pressures, coupled with volatility of the markets in Europe and unrest in the Middle East, require us to further improve the efficiency of the airline."
Flick also cited growing maintenance costs for the Fokker 50, and said the retirement will be "a substantial cost reduction for (BAU)." (BAU) will now work to optimize its network for the winter, and is evaluating "an option to introduce additional modern turboprop airplanes for the summer of 2012," Flick stated.
September 2011: AirBaltic (BAU)’s two main shareholders (the Latvian state and Baltijas Aviacijas Sistemas (BAS), the company controlled by (BAU)’s President & (CEO) Bertolt Flick) are entangled in another dispute, as the government vows to make a capital injection in (BAU) conditional on Flick’s resignation, according to media.
The Latvian state owns 52.6% of (BAU), while (BAS) has 47.2%. Past disputes have been about recapitalization as well as the expansion of Riga airport, (BAU)’s main hub.
VP Corporate Communications, Janis Vanags confirmed the public dispute, but stressed (BAU) was operating normally. “Passenger numbers remain stable but the dispute is having an effect on the image of the company,” he said. He refrained from detailing the exact content of the dispute. He also could not confirm if (BAU) urgently needed a recapitalization because the financial report for 2010 was not yet officially released. Latvian media reported that (BAU) posted a loss of -LVL34.2 million/-$67.2 million last year and that losses continue this year.
Reportedly, the government and Flick reached a preliminary agreement for a +LVL70 million/+$139 million capital injection. It was reported that Flick would step down on the completion of the deal.
“In the past, the government did commit to a capital injection, but it did take >9 months before it effectively did so, putting financial stress on airBaltic (BAU),” an insider said. The person added that there was “potentially a lot of political game playing involved, promoting a rescue and nationalization of (BAU) in the light of the upcoming extraordinary parliamentary elections.”
The political dispute surrounding AirBaltic (BAU) has cost (BAU) €10 million/$14 million, according to (BAU)’s President & (CEO) Bertold Flick. Even though passenger numbers for the last several months have increased year-over-year, travel agencies are reducing forward bookings, Flick said.
Flick said that (BAU) will be a “hot topic” in next week’s Latvia elections, which will further delay a solution on (BAU)’s future. He called the situation absolutely negative and damaging to (BAU)'s reputation. “There are separate opinions and this creates a lot of problems,” said Flick, adding that (BAU) told the state it would find its own solution to its financial problems.
Flick runs the airline from his office in Berlin since a raid on (BAU) offices by the country’s Corruption Prevention and Combating Bureau some months ago. Flick said he left the country for his own security and that the government wants to take over (BAU), “with aggressive methods.”
Flick was also critical of the new baggage transfer fee policy at its Riga hub that offer discounts for off-peak travel. “(BAU) as a hub carrier operates 70% of the flights in Riga and mostly at peak times,” Flick said. “We pay 99% of all the fees of the airport. This is absolutely discriminating and we [have] present[ed] this to the European Commission (EC),” he said.
Responding to the Latvian Prime Minister, who said that a new foreign CEO should run (BAU), Flick said he was the “only person” with the “right” to name a (CEO), because he is also an owner. “If I were not [an owner of (BAU)], I [would have] left this company already,” Flick said, adding that if he and the government could agree on the right solution, he would be prepared to leave.
Flick also said (BAU)’s plans to renew its 737/757 fleet have been delayed. “This is absolutely not good,” he said.
Later, AirBaltic (BAU) filed for legal protection from its creditors and submitted a plan to the court for continued operations. The loss-making Latvian national airline is entangled in a destructive dispute between its two main shareholders, the Latvian state and Baltic Aviation Systems (BAS), the company controlled by (BAU)'s President & (CEO) Bertolt Flick. The dispute centers on a capital injection, but is a culmination of years of tense relations and political wrangling. The Latvian state owns 52.6% of (BAU) while (BAS) has 47.2%.
Flick said that the government of Latvia “has neglectfully and repeatedly delayed any decisions regarding the capital increase” and that (BAS) has declared its willingness to cover the capital increase fully or proportionally together with the government of Latvia for the past six months. In order to come out of a stalemate, “(BAS) agreed to all government conditions on September 16. On September 20, the government again did not take a decision to participate in the capital increase of the airline, or to allow (BAS) to increase the capital unilaterally, but suddenly and surprisingly announced potential sale of its shares in the airline,” Flick said.
By initiating a legal process similar to a USA Chapter 11 bankruptcy filing, Flick is attempting to prevent the Latvian government from interfering in airline decision making. As part of the procedure, an administrator is nominated to be responsible for the legal protection plan that all parties have to follow—including shareholders, management and the supervisory board. The administrator and the plan for continued operations must be approved by the court.
“The board of airBaltic (BAU) is currently in negotiations with all the stakeholders of the airline,” Flick said. “All of them, except the government of Latvia, are ready to support the airline in the future. The legal protection plan, approved by the court, must be obeyed and will help to overcome the blockage created by the government of Latvia as a minority shareholder.” He added that the management will not change during the period of legal protection “and all the creditors of the carrier will receive the outstanding debts.”
During the first seven months of 2011, (BAU) increased passengers carried to 1.97 million, up +7% from the year-ago period. The airline’s load factor gained 6% points year-over-year, reaching 73% LF.
Later, The legal protection plan filed by Latvian national airline airBaltic (BAU) was rejected by the court, although it did not provide details. (BAU) President & (CEO) Bertolt Flick said the (BAU) board would continue airline operations.
In the latest development in the (BAU)’s shareholder dispute, the Latvian government considered proportionally increasing (Bau)’s capital with the participation of both shareholders (the Latvian state and Baltic Aviation Systems (BAS)), selling the state-owned shares to (BAS), and setting up a new national airline. Latvia owns 52.6% of (BAU) while (BAS), the company controlled by Flick, owns 47.2%.
Additionally, Prime Minister, Valdis Dombrovskis confirmed that the Latvian government has contracted with consultancy company Prudentia to evaluate how much the (BAU) recapitalization and restructuring plan would cost and how much establishing a new airline would cost, a move that prompted Flick to take legal action with the prosecutor general's office against Prudentia, citing conflict of interest.
“Prudentia has had a conflict of interest, and we have to consider that commercial information provided by airBaltic (BAU) will be used for the benefit of a competing airline,” Flick said in a statement. “It is now no longer surprising why a solution regarding airBaltic (BAU) has not been reached for more than seven months, while at the same time details of the new airline will be clear within the coming days at the earliest and within two weeks at the latest. Confidence in Latvia's national airline has been methodically and systematically undermined in order to pave the way for a new project.”
(BAU) said its board filed for legal protection to “break the blockage from the Latvian government.”
Later, it was established that (BAU) will receive €153.7 million/$201.9 million in new capital financed by its two main shareholders, the Latvian government and Baltic Aviation Systems (BAS), Latvian media reported.
The country’s Prime Minister, Valdis Dombrovskis announced that the government of Latvia and (BAS) reached agreement and would jointly inject the capital into (BAU). The Latvian government will secure €82.3 million, while the private investor (BAS) will secure €71.4 million.
As part of the agreement, President & (CEO) Bertolt Flick agreed to step down.
October 2011: AirBaltic (BAU) has named former Malev Airlines (HGA) (CEO) Martin Gauss as its new (CEO) & Chairman, effective November 1. Gauss replaces Bertolt Flick, who stepped down as part of an agreement reached last month between (BAU)’s two main shareholders.
Gauss, 43, was (CEO) of (HGA) between April 2009 and May 2011; he resigned after failing to reach an agreement on his compensation. He is also a 737 captain who has logged >8,000 flight hours.
“I am very much looking forward to being part of the airBaltic (BAU) team,” said Gauss. “(BAU) has a very strong brand and is an energetic and innovative company. It will be my task to set up clear structures which are missing at present. I will introduce corporate governance in order to reach a financially positive airline operation.”
December 2011: The Latvian government has acquired the 47.2% stake in airBaltic (BAU) previously held by Baltijas Aviacijas Sistemas (BAS), the company controlled by former (BAU) President & (CEO) Bertolt Flick. It now owns 99.8% of (BAU).
The purchase follows the collapse of the Lithuanian bank Snoras and its subsidiary Krajbanka, which held the (BAS) shares in airBaltic (BAU) as collateral. The government used its pre-emptive right to make the purchase.
“The government decided to act proactively in the defense of the state’s interests and take control of airBaltic (BAU),” the Transport Ministry said. It bought the shares for their nominal value of LVL224,453/$432,106, a move Riga’s local government is contesting.
In a reaction posted on the national news agency (LETA)’s website, Flick said: “It’s obvious that LVL200,000 for 47.2% of (BAU)’s shares is a disproportionately low amount, and in this situation, the government [in the position] as Krajbanka’s administrator has acted against the interest of the airline and the bank’s depositors.”
Flick resigned from the airline in October as part of an agreement between (BAS) and the Latvian state, to increase the company’s share capital with about LVL110 million in two tranches.
The government has already injected LVL16 million, and (BAS) has injected LVL14 million into the airline. By December 15, the state will invest another LVL41.6 million and (BAS) LVL37.7 million.
In his statement on LETA.lv, Flick said that (BAS) has so far complied with all obligations arising from airBaltic (BAU) shareholders on the October 3 agreement, including a capital injection of LVL14 million. He noted that “(BAS) has always been ready to fulfill the agreement made between (BAU) shareholders.”
(BAS) will analyze the situation and “assess which steps to take to defend the legal rights of a shareholder on the issue [the takeover of (BAS)’s shares by Latvia’s Transport Ministry],” Flick said.
The Riga City Council wants the government to revoke its decision to buy 47.2% of (BAU) because the shares could be sold at a much higher price. It believes its interests as a major Krajbanka depositor were injured by the deal.
The council said the price of the security should have been determined, not according to the nominal value of the shares, but by the amount of the loans worth dozens of millions LVLs. The 47.2% stake is not worth LVL224,453 “but at least LVL50 million,” it said.
January 2012: AirBaltic (BAU) is under full control of the Latvian government again after it has taken over the 47% stake from Baltijas Aviacijas Sistemas (BAS). It had previously been forced to file for bankruptcy protection but has continued operations. It plans to significantly reduce its fleet and concentrate on just Dash 8-400s and either A320 or 737NG airplanes as part of a fleet modernization program. Up to 50% of its staff is expected to be laid off as part of a restructuring plan currently being finalized.
It has given up its Vilnius to Tallinn route by the end of October, the last point to point route operated by AirBaltic (BAU). It will now just concentrate on its Riga hub. From Riga, it has terminated its routes to Almaty, Belgrade, Kuopio, Madrid, Tromsø, Visby, and Yerevan. It will also give up its Riga to Rovaniemi route on March 19 and not operate to Athens during the winter season. (BAU) will also not resume its routes to Amman Queen Alia, Beirut, and Dushanbe next summer.
(BAU) will increase Riga service to Vienna (7x-weekly to 12x-weekly), Zurich (6x-weekly to daily) and Munich (7x-weekly to 12x-weekly) for its summer service beginning March 25.
(BAU) will increase 2x-weekly seasonal Riga to Moscow Domodedovo service to 7x-weekly for the summer season, in code share with Transaero Airlines (TRX). (BAU) will reintroduce 4x-weekly, Riga to Dublin service on June 1. (BAU) will also increase 5x-weekly seasonal Riga to Billund service to 7x-weekly June 1.
The Baltic Aviation Academy received Lithuanian Civil Aviation Administration (CAA) approval for its eLearning pilot (FC) qualification course. The online course consists of 15 type rating training programs including A320, A330, A340, 737 CL, 737 NG, 747, 757, 767, 777, ERJ-145, E170, E190.
airBaltic (BAU) is not currently recruiting flight crew (FC). See FltOps.com and FAPA.aero.
February 2012: AirBaltic (BAU) will increase 5x-weekly seasonal, Riga to Billund service to 7x-weekly on June 1. (BAU) has named Michael Grimme as Senior VP Sales & Marketing. Grimme is the former Director Sales & Marketing at TraviAustria Gmbh. Grimme has also served as Director of Marketing & International Sales for the German carrier (LTU).
March 2012: Air Baltic (BAU) will increase seasonal Riga service to Vienna (7x-weekly to 12x-weekly), Zurich (6x-weekly to daily), Munich (7x-weekly to 12x-weekly), Amsterdam (7x-weekly to 12x-weekly), Brussels (7x-weekly to 12x-weekly), Billund (5x-weekly to 7x-weekly) and Moscow Domodedovo (2x-weekly to 7x-weekly).
(BAU) is implementing a new restructuring plan, "ReShape," to return the struggling airline to profitability and sustain future development at its North Hub Riga. The program, which aims to reduce costs by -16%, includes fleet modernization, cost optimization, operational efficiency, revenue enhancement and network improvements.
(BAU) (CEO) Martin Gauss said that (BAU) has achieved “unprecedented growth” in the last few years. However, it came at a cost to the airline. “We made the biggest loss in our history in 2011, about -€100 million/-$131.2 million. And we have to realize yields will be further shrinking,” he said. (BAU) is focusing on achieving LVL330 million/$619.6 million of improvements in the next 5 years. (BAU) is estimating a 2012 loss of -LVL38 million and a loss of -LVL16 million in 2013.
In December 2011, the Latvian government acquired the 47.2% stake in (BAU) previously held by Baltijas Aviacijas Sistemas (BAS). It now owns 99.8% of (BAU).
Gauss said (BAU) expects to return to profitability in 2014. “Nevertheless, growth rates will be smaller compared to the past. [The] outlook in passenger numbers also remains conservative, for example, from 2.4 million in 2011 to 4 million by 2016,” he said.
(BAU) will reduce its workforce -15% through 2012. (BAU) has grounded six of 10 Fokker F 50s, which will be completely phased out by the fall, a year earlier than originally planned. Leases on several 737-300s will also expire. 2 757-200s will be taken out of service and will be leased out until 2016.
“We are currently in the final talks with Airbus (EDS) and Boeing (TBC) regarding an order for A319s or 737-700s,” Gauss said, and a decision should be made over the summer. (BAU) hopes to take delivery of the 1st airplane by 2015, he said. “As an interim solution, we will introduce leased A319s or 737NGs to be able to reduce fuel by -15% until we get our own new airplanes,” he said.
(BAU) is open for talks with alliances and the Latvian government does not want to retain long-term ownership of the airline.
(BAU) serves 60 destinations with a fleet comprising 6 737-500s, 8 737-300s, 2 757-200s, 10 Fokker F 50s and 8 Bombardier Dash 8-Q400 NextGens.
April 2012: AirBaltic (BAU) will operate 5x-weekly, Riga to Budapest seasonal Bombardier Dash 8-Q400 service for summer 2012.
May 2012: Air Baltic (BAU) has selected Martin Sedlacky as (COO) and a member of the executive board. Sedlacky has held positions with a strong focus on business restructuring, including airlines, across Central and Eastern Europe, Scandinavia, the USA, Singapore and Malaysia.
June 2012: Air Baltic (BAU) has announced the extension of Chairman & (CEO) Martin Gauss’s contract through March 31, 2014. Gauss joined (BAU) as Chairman & (CEO) in November 2011, initially on a 12-month term.
July 2012: Air Baltic (BAU) signed a Letter of Intent (LOI) to order 10 Bombardier (BMB) CS300s and take purchase rights on another 10. (BAU) is hoping to acquire a CSeries simulator for its Riga training center.
(BAU) has a three-bay simulator center, which it uses for in-house and 3rd-party training. One of the bays houses a multi-purpose cabin trainer and another holds a 737 Classic full-flight simulator. The final bay is vacant.
(BAU) (CEO) Martin Gauss said “It is now very likely that the empty bay will have a CSeries simulator. We will probably have the 2nd CSeries simulator in Europe. Lufthansa (DLH) will have one, we will have one and we will see if we can do something together if either of us has overspill.”
Gauss wants to invest in the simulator to help with slot availability and convenience. “Lufthansa (DLH) has 30 CSeries on order, plus 30 options, so it could be very difficult to get slots. The alternative is Montreal which is a long distance from Riga.”
(BAU) is now looking at the business case and availability for the simulator. “We would need it half a year before the transition,” Gauss said. (BAU) is due to take its 1st CS300 in the 4th quarter of 2015.
August 2012: AirBaltic (BAU) is moving forward with privatization plans as the government-owned carrier anticipates its cost-cutting program leading to profitability by 2014.
(BAU) (CEO) Martin Gauss said (BAU) is “open for investors” although the timing for when the cost of shares will be announced has not yet been decided. Gauss also confirmed (BAU) is in talks with potential investors, which include airlines and investment companies. “Nothing will be ruled out,” he said.
(BAU) is 99% owned by the Latvian government and 0.2% by Transaero (TRX).
(BAU)’s restructuring program, which was implemented in November 2011, has shown better-than-expected results. (BAU) is targeting a -LVL300 million/-$537 million reduction in costs by 2016.
“We are +LVL50 million/+$89.4 million better than last year,” Gauss said. “(BAU) expects to lose -LVL38 million this year; next year the loss should be -LVL16 million and then we should become profitable,” he said.
Gauss said (BAU) has implemented several cost-cutting measures, which includes reducing -70% of the management and -15% of staff by year end. “We also reduced our fleet from 34 to 24 airplanes and we [will further reduce the fleet] to 20 airplanes for the coming winter,” he said.
(BAU) plans to operate 8 Bombardier Dash 8-Q400s and hopes to add 2 more Dash 8-Q400s, as well as 10 737-300s. It will return the last 4 737-500s to the leasing company. (BAU)’s contract for 2 (ILFC)-leased 757-200s will expire in 2015. (BAU) sub-leased the 757s to a Cambodian airline.
By next summer, (BAU)’s fleet should grow to 24 airplanes and it should have new 737-300 leasing contracts. “There are enough 737s on the 2nd-hand market,” Gauss said. He expects 737-300 monthly leasing rates to be between $90,000 and $125,000, depending on their configuration.
“If we would have had our 10 CS300s ordered in Farnborough already in the fleet, we would save -$30 million in costs annually,” Gauss said. (BAU) plans to configure the CS300s with 145 to 160 seats.
AirBaltic (BAU) is planning to retire its remaining 8 Fokker F 50s still operating from its Riga hub to Helsinki Vantaa (HEL), Kaliningrad Khrabrovo (KGD), Kaunas International (KUN), Lappeenranta (LPP), Minsk International 2 (MSQ), Palanga International (PLQ), Tallinn Ülemiste (TLL), Tampere Pirkkala (TMP), Vilnius International (VNO) and Warsaw Fryderyk Chopin (WAW) airports by the end of the summer timetable season, with the last airplane expected to be removed from service by November 1.
September 2012: Air Baltic (BAU) is to be privatized again with the Latvian government putting a 49.99% stake in (BAU) up for sale with expressions of interest from potential bidders due until November 1. The Latvian government currently holds 99.8% of the shares in Air Baltic (BAU) after having to acquire a similar minority stake from Baltijas Aviacijas Sistemas in November 2011 when (BAU) had been forced to file for bankruptcy protection. In other news, (BAU) now plans to continue to operate 2 Fokker F 50s until the end of the (IATA) summer timetable period in March 2013.
airberlin (BER) and airBaltic (BAU) have a code share agreement under which (BER) will add its code to (BAU) flights to Riga from Dusseldorf, Hamburg, Munich, Frankfurt, and Berlin.
(BAU) has confirmed plans to acquire four new Bombardier Dash 8-Q400s, which will join its fleet on lease in spring 2013.
In July, (BAU) (CEO) Martin Gauss said he was looking to add 3 new or used Dash 8-Q400s. “We are in final discussions to take 2 new Dash 8-Q400s in May and 2 in June,” Gauss said on the latest developments. “There were discussions about taking used airplanes on lease this autumn, but we are going with the new ones now,” he said.
(BAU) is aiming to take the airplane from an operating lessor straight off the production line, rather than have the “hassle” of a sale-leaseback deal, according to Gauss. “The fact is that the serial numbers of four brand new Dash 8-Q400s should be on our apron next spring.”
This winter, (BAU) will operate 10 737s, 8 Dash 8-Q400s and 2 Fokker F 50s. It also has 2 757s, which are on lease in Cambodia.
“We have delayed the grounding of our Fokker operations by a short while because we couldn’t get the [1st] 2 Dash 8-Q400s in as soon as we wanted. We couldn’t get them this autumn, so they will come in spring,” Gauss said.
(BAU) is phasing out its 10 F 50s. It has already returned 3 to the lessor and discussions are underway to return 2 more this autumn. Of the final 5 F 50s, 3 will be returned next spring and only 2 will remain in active service throughout this winter.
Between 2015 and 2017, (BAU) is planning to take delivery of 10 CS300s under a letter of intent (LOI) signed at the Farnborough Airshow. By 2017, all 737 leases will be expired.
“We will get our 1st CSeries at the end of 2013. They are building it, there’s no doubt about it, and we are getting happier and happier with all the results coming from the engine testing,” Gauss said.
He added the CSeries will slash -$30 million a year from (BAU)’s operating costs, stressing this is a conservative estimate. “That makes a big difference to whether we make a loss or profit, but unfortunately we can’t have the airplanes yet. And this is the lower end of the figure we calculated, based on performance data when we decided to take the airplanes. Now we are just finalizing the contract,” he said.
October 2012: AirBaltic (BAU) launches 2x-weekly, Riga to Chisinau service on October 29. (BAU) will operate seasonal winter service from Riga to London (8x-weekly), Paris (9x-weekly), Brussels (10x-weekly), Amsterdam (9x-weekly), Budapest (3x-weekly), Vienna (10x-weekly), Munich (10x-weekly), Dusseldorf (5x-weekly), Billund (4x-weekly), Bergen (4x-weekly), Chisinau (2x-weekly), and Oslo (20x-weekly) on October 28.
(BAU) (CEO) Martin Gauss is keen to explore the potential for regional consolidation with Baltic carrier Estonian Air (ENA), although management at the neighboring carrier has been quick to dismiss the idea.
“We are looking at the Baltic region intensively and will take whichever opportunities arise,” Gauss said. “We are AirBaltic (BAU) and the Baltics are 3 countries. I would like to see something happen. When we are seeing consolidation across the whole of Europe, it makes sense that we should play our part.”
While Gauss wants to explore options, he effectively rules out the idea of a (BAU)-led acquisition.
“I would not recommend acquiring Estonian Air (ENA) from the AirBaltic (BAU) side. I would look at all possible ways of bringing together synergies, but I wouldn’t acquire them. It would not be a good idea for either side because we each have our own pasts. There must be way of doing this in a clever way.”
Current (ENA) (CEO) Tero Taskila is very familiar with the (BAU) operation. He was (CCO) of (BAU) until a year ago but left (BAU) to run (ENA) shortly before Gauss came on board as (CEO).
Taskila said: “There are no negotiations. I think the whole discussion and rumors were started by a Lithuanian Minister, who said it would be a good idea. A couple of weeks later, the Latvian Minister said maybe we should discuss it. I think that idea has appeared every 3 years. I would say never say never because you don’t know what will happen in future, but at the moment there is no discussion.”
Air Baltic (BAU) is currently being evaluated as an investment target by German aviation investment group, Intro Aviation according to a report by Latvian newspaper "Dienas Bizness." The Latvian government had announced plans to sell 49.99% in (BAU) back in August. Intro Aviation already owns a majority stake in Austrian regional carrier, InterSky ((IATA) Code: 3L, based at Friedrichshafen Bodensee airport (FDH)).
Air Baltic (BAU) is recruiting contract pilots flight crew (FC) with European Union (EU) citizenship.
See FAPA.aero: Pilot Career Conferences & Job Fairs
For Future & Active Pilots (FC).
November 2012: Adria Airways (ADR) and Air Baltic (BAU) will both be faced with an investigation the European Commission (EC) has launched on November 20 to review if capital increases and loans provided by the Slovenian and Latvian governments between 2007 and 2011 can be considered as legal state aid under European Union (EU) legislation. The (EC) will now check if private investors would have possibly made similar decisions in such situations. The (EC) can order the financially struggling airlines to pay back the state aid received, if it considers the payments from the governments to the national carriers as illegal. It has previously done so in the cases of Malev (HGA) and Spanair (SPP).
AirBaltic (BAU) has appointed Michael Grimme as (CCO). Grimme joined (BAU) as Senior VP Sales & Marketing early this year. Previously, he was Director Sales & Marketing at TraviAustria, an Information Technology (IT) service provider for the travel industry in Central Europe.
December 2012: In the short range field, airBaltic (BAU) has provided some competition to (CSA) Czech with 3 weekly flights to Prague, with marketing connections to Scandinavia and the former Soviet region, the latter being a rare market, where (CSA) has some modest competitive strength. airBaltic (BAU) has itself recently experienced its share of struggles, but did earn a solid +$7 million net profit in the peak 3rd quarter. And while it may be reducing some capacity on some routes, it does plan 6 new destinations for next summer.
(BAU) will launch weekly, Riga to Heviz Bombardier (BMB) Dash 8-Q400 service May 4 and 3x-weekly, Riga to Prague Dash 8-Q400 service on January 1. (BAU) will launch Riga service to Larnaca (weekly, April 6, 737), Rijeka (weekly, June 6, 737-300), Olbia (2x-weekly, May 4, 737-300) and Malta (weekly, May 11, 737-300).
(BAU) has firmed an agreement to acquire 10 Bombardier (BMB) CS300 airplanes, with 10 options. The agreement was previously announced at the Farnborough Airshow. Based on list prices, the order is valued at approximately $764 million and could increase to $1.57 billion, if the options are converted.
(BAU) (CEO) Martin Gauss said, “Earlier this year, we launched our "ReShape" business plan that calls for the replacement of older airplanes and the transition to ‘greener flying’ with an exclusive all-Bombardier (BMB) fleet that will eventually involve taking on more Dash 8-Q400 NextGen airplanes together with the new CSeries airplanes. The C300 airliner and the Dash 8-Q400 NextGen turboprop will optimize (BAU)’s network and fit perfectly in our ReShape business plan.”
Bombardier (BMB) had orders and commitments from 14 customers for a total 352 CSeries airplanes by September 30, including firm orders from 9 customers for 138 airliners. 1st flight is scheduled for the end of June 2013.
January 2013: airBaltic (BAU) returned to the Czech market adding Prague (PRG) to its Riga (RIX) network on 1 January. The route is served with 76-seat Dash 8-400 equipment offering 3x-weekly flights. Following Czech Airlines (CSA)’s withdrawal from the route last month, airBaltic (BAU) is now the solo carrier on the route. Czech Airlines (CSA), which previously operated the route in monopoly conditions since September 2004, pulled all of its services to the Baltics and now offers them only as a code share with airBaltic (BAU) via Riga.
airBaltic (BAU) will increase 10x-weekly, Riga to Amsterdam service to 11x-weekly on March 3 and 2x-weekly, Riga to Chisinau service to 3x-weekly on January 16. (BAU) will launch Riga service to Larnaca (weekly, April 6, using 737s), Rijeka (2x-weekly, June 6, using 737-300s), Olbia (2x-weekly, May 4, using 737-300s), and Malta (weekly, May 11, using 737-300s).
March 2013: airBaltic (BAU) will launch daily, Riga to Milan Malpensa 737-300 service March 31 in code share with Alitalia (ALI).
Danish lessor, Nordic Aviation Capital (NAC) has signed a firm purchase agreement for 4 Bombardier Dash 8-Q400 NextGens to be placed with airBaltic (BAU).
The $134.8 million deal will take (NAC)’s Dash 8-Q400 portfolio to 43 airplanes and firms up (BAU)’s Dash 8-Q400 fleet expansion plans.
“The four airplanes will be operated by airBaltic (BAU) and will join eight Dash 8-Q400 NextGen airliners ordered directly from Bombardier (BMB) as the airline transitions to an all-Bombardier fleet,” the (NAC) said.
At the 2012 Farnborough Air Show airBaltic (BAU) committed to 10 CS300 airplanes, with purchase rights on a further 10, which will be used for its fleet renewal. It firmed the deal in December.
Billund-based, (NAC) has also recently sealed a sale and leaseback with Marfin Investment Group covering 10 Dash 8-Q400s to be operated by Olympic Air (OLY). It has also agreed to the sale and lease back of 8 Dash 8-Q400 NextGens with Eurolot of Poland and the purchase of 12 CRJ1000 NextGens with Garuda Indonesia (GIA).
April 2013: AirBaltic (BAU) has narrowed its full-year net loss to -LVL19 million/-$35.3 million in 2012, marking a +77% improvement from a -LVL85 million loss in 2011. “We are very confident as we continue to perform ahead of our plan. Last year, we consistently achieved better net results every month. We improved our consolidated net result +LVL66 million and our yield +10% compared to a year earlier. We are ahead of our schedule to reach profitability in 2014,” (BAU) (CEO) Martin Gauss said.
Revenue slipped -1% to LVL229, while operating costs stood at LVL 248 million, down -LVL58 million on the prior year. No operating profitability figures were given by (BAU).
Passenger numbers fell -8% to 3.08 million, but yield rose +10% to LVL68.3 and (RASK) increased +15% to LVL5.2 santimi (cents).
(BAU), which serves 60 destinations from its Riga home base, said the performance “far surpassed its original business turnaround plans.”
This summer (BAU) will add 6 new destinations: Heviz to Balaton in Hungary, Larnaca in Cyprus, Malta, Olbia in Sardinia, Prague in the Czech Republic, and Rijeka in Croatia.
(BAU) began Riga to Istanbul (SAW) service on March 31. (BAU) begins new summer season service from Riga: Olbia (2x-weekly), Malta (weekly), Prague (4x-weekly), Larnaca (weekly), Heziz-Balaton (weekly), and Rijeka (2x-weekly).
Air Baltic (BAU) will grow its Bombardier Dash 8-Q400 NextGen fleet from 8 to 12 this summer, to be phased in between May and July. (BAU) will lease the airplanes from Nordic Aviation Capital A/S (NAC). Based on list prices, the fleet addition is worth approximately $134.77 million.
The airplanes will be operated on (BAU)’s network of 60 destinations in Europe, Middle East and the Commonwealth of Independent States (CIS).
(CEO) Martin Gauss calls the move “a step ahead in building a more uniform fleet of two airplane types and will improve our efficiency, save on fuel and cost, and reduce environmental footprint.”
At the end of last year, (BAU) firmed an agreement to acquire 10 Bombardier CS300 airplanes with 10 options. The letter of intent (LOI) was previously announced at the Farnborough Airshow.
May 2013: Air Baltic (BAU) said it slimmed its 1st-quarter net loss by -LVL6.7 million/-$12.3 million, representing a +41% improvement.
(BAU) increased its seasonal offering from Riga (RIX), as it launched new flights on May 4 to Balaton (SOB) in Hungary, and Olbia (OLB) in Sardinia. Balaton is now offered with a single weekly frequency and operated using Dash 8-Q400s, while Olbia launched with a 2x-weekly schedule, and will be increased to 3x-weekly on June 19. The latter service will see 737-500s deployed on the route. Both routes will have disappeared from (BAU)’s schedule by the end of September.
(BAU) further expanded its offering from its Riga (RIX) hub on May 12, when it inaugurated operations on the 2,500 km route to Malta (MLA). (BAU), which offers weekly (Sunday) departures on the route until October 20, is the lone carrier operating in the market from the Latvian capital to the Mediterranean island. All flights are operated using 737-300s and 737-500s.
June 2013: AirBaltic (BAU) began 2x-weekly, Riga to Rijeka 737-300 service.
July 2013: AirBaltic (BAU) added a daily flight to its 2x-daily, Riga to Brussels, Bombardier Dash 8-Q400NG service.
August 2013: AirBaltic (BAU) has reported a +15% year-over-year improvement in airplane utilization for the 2013 summer season.
August 2013: According to FAPA.aero, AirBaltic (BAU) is not presently recruiting pilots (FC).
September 2013: airBaltic (BAU) has posted a 2nd-quarter net profit of +€1.37 million/+$1.8 million, reversing a loss of -€10.15 million during the same period last year, and exceeding its own 2014 profitability target.
(BAU) will continue its weekly Riga to Larnaca 737 service through the winter season. (BAU) will offer 4x-weekly, Riga to Aberdeen service in Spring 2014.
October 2013: airBaltic (BAU) recorded a 3rd-quarter net profit of +€13.2 million/+$18.2 million, reversing a -€26.72 million loss into a net profit of +€0.72 million in the 9 months through September 30. Third-quarter net profit almost doubled from +€6.84 million for the same period last year, despite a drop in passengers from 920,000 to 880,000. Revenue for the quarter rose +2% to €103.29 million.
Etihad Airways (BAU) and Latvia-based airBaltic (BAU) have signed a code share agreement and will launch 4x-weekly, Riga to Abu Dhabi services from December 16, using an (EHD) Airbus A319.
(EHD) will place its code on 19 airBaltic (BAU) destinations and (BAU) will place its code on 6 (EHD) destinations in Asia, Middle East, and Egypt.
(BAU) will launch once weekly, Riga to Larnaca.
The new agreement is Etihad (EHD)’s 47th code share agreement.
December 2013: airBaltic (BAU), the flag carrier of Latvia, expanded its international network on December 16th, with a new service from Riga (RIX) to Abu Dhabi (AUH). (BAU)’s third route outside Europe is scheduled to be operated 4x-weekly by Etihad Airways (EHD)’s 125-seat A319s. The 4,373 km sector will face no direct competition from other carriers. Commenting on the launch, Valdis Dombrovskis, Prime Minister of Latvia, said: “Today marks the first time Riga has been linked by air with Abu Dhabi, 1 of the world’s fastest growing cities, and a global hub for our airBaltic (BAU)’s code share partner Etihad Airways. This direct flight will open up a range of business and leisure opportunities, which hitherto never existed. It will support trade development between Latvia and the rest of the world, increase tourism in both directions, and result in a range of new connection options for customers of both airlines.”
AirBaltic (BAU) commenced its new code share with Etihad Airways (EHD) on December 16th 2013, launching a 4x-weekly A310 service and linking its Riga hub with (EHD)’s in Abu Dhabi. Riga is the Baltic region’s principal transfer point (the airport says that 33% of passengers in 2013 are transit/transfer traffic) and Abu Dhabi is rapidly emerging as an important hub for travellers flying between Europe and Asia.
Following airBaltic (BAU)’s near bankruptcy in 2011 and its subsequent renationalisation and investment from the Latvian government, the state has been on the look out for a private sector investor. Meanwhile, (CEO) Martin Gauss has been focusing on (BAU)’s restructuring program and expects to restore profitability in 2014 after achieving better than expected results for 9 months 2013.
An (EU) investigation into state aid received in 2011 is ongoing and could potentially lead to (BAU) having to repay the funds received from the state. This would increase the pressure to secure fresh investment. Some observers have suggested that the (EHD) partnership could be a stepping stone to a future equity relationship. The code share attests to some meeting of minds already.
January 2014: AirBaltic (BAU) relaunches Riga - Gothenburg 4x-weekly service on April 14 and discontinues summer service on Riga to Kaunas. (BAU) will also begin weekly, Riga to Palma de Mallorca service June 1.
February 2014: The European Commission (EC) has launched in-depth investigations into the financial rescue deals for Cyprus Airways (CYP) and Estonian Air (ENA), to verify whether cash infusions breach European Union (EU) state aid rules. Earlier investigations into both carriers for similar suspected infringements are still ongoing.
In Cyprus Airways (CYP)’s case, the (EC) will investigate the Mediterranean island government’s plans to support the restructuring of the national carrier with €103 million/$139 million. The (EC) said it would “investigate in particular whether the restructuring plan is suitable to make Cyprus Airways (CYP) viable without continued state support and to offset the competition distortions created by the state aid.” It also has concerns as to whether (CYP) is making a sufficient contribution to the cost of restructuring. Cyprus Airways (CYP) has been loss-making for several years.
The opening of an in-depth investigation gives interested 3rd parties an opportunity to comment on the measures under assessment. The (EC) gave notice of its concerns last year.
Last December, (CYP) had notified the (EC) of a €102.9 million aid package to restructure Cyprus Airways (CYP) over a 5-year period. This included a €31.3 million capital injection granted in 2012, conversion of €63 million of debt to equity and €8.6 million to cover the deficit of the company's Provident Fund, a benefit scheme for some employees.
(EU) rules say that governmental restructuring aid may be granted only once in 10 years, so that chronically weak companies are not kept alive artificially, to the detriment of better-run competitors. The (EC) noted it had previously approved restructuring aid for Cyprus Airways (CYP) in 2007 and that since then, (CYP) had received the 2012 capital injection and a €34.5 million loan the following year.
In Estonian Air (ENA)’s case, the (EC) is looking at whether a 2013 €40.7 million restructuring grant is legal. As with Cyprus Airways (CYP), the (EC) has doubts as to whether this will ensure (ENA)’s long-term viability. Similarly, it said that earlier state interventions totaling €57 million since 2009 may be deemed to have breached the “once in a decade” ruling.
Several other (EC) investigations are underway into (LOT) Polish Airlines, airBaltic (BAU), Adria Airways (ADR) and (SAS) Scandinavian Airlines.
AirBaltic (BAU) has appointed Christophe Viatte as (CCO). Viatte will be responsible for leading (BAU)’s future commercial strategy. He will manage all commercial departments including Sales, Marketing, e-commerce, Customer Care, Product, Revenue Management, Network Planning, Cargo and Partnerships.
April 2014: AirBaltic (BAU) launched 4x-weekly, Riga to Aberdeen (March 30), to Gothenburg (April 14) and to Bucharest (June 3); 2x-weekly, to Burgas (May 25), and to Varna (June 24); and weekly, to Palma de Mallorca services.
EasyJet (EZY) and airBaltic (BAU) have become the latest European carriers to allow passengers to use personal electronic devices (PEDs) throughout all phases of flight. The European Aviation Safety Agency (EASA) relaxed its rules on (PED) use on takeoff and landing last December, although implementation is being handled by national regulators.
EasyJet (EZY) implemented the change April 14, while Latvian carrier airBaltic (BAU) will adopt the new policy from April 18, provided the devices are put into flight mode. Most carriers, including airBaltic (BAU), have maintained restrictions on the use of bulkier items, but easyJet (EZY) said passengers can use their laptops during all flight phases. “All passengers onboard will be allowed to use their (PED)s such as laptops, (DVD) players, tablets and mobile phones onboard in flight mode throughout the whole flight including during takeoff and landing,” easyJet (EZY) said.
The USA was the first to lift its (PED) restrictions, followed by Europe; however, other regions are still working to implement the changes.
May 2014: airBaltic (BAU), the flag carrier of Latvia, increased its seasonal offering with the launch of a new route from its Riga (RIX) hub to Bourgas (BOJ) on May 25th. The 1,625 km sector to the 2nd largest city on the Bulgarian Black Sea coast, will be operated 2x-weekly (Thursdays and Sundays) until August 31ts, utilizing (BAU)’s 142Y-seat 737-300s. No other carrier serves this airport pair.
AirBaltic (BAU) will launch weekly seasonal, Riga to Poprad 737-300 service on December 13.
June 2014: AirBaltic (BAU) the flag carrier of Latvia, launched summer, 2x-weekly, Riga to Burgas Boeing 737-300 service. (BAU) increased its European offering with the launch of a new route from its Riga (RIX) hub to Bucharest (OTP) on June 2nd. The 1,392 km sector to the Romanian capital will be operated 3x-weekly utilizing (BAU)’s 76Y-seat Dash 8-Q400s. There is no competition on this airport pair.
AirBaltic (BAU) began summer weekly, Riga to Palma de Mallorca Boeing 737 service. (BAU) expanded its seasonal offering with the launch of services from its Riga (RIX) base to Varna (VAR) in Bulgaria on June 24th. The 1,556 km sector to the largest city and seaside resort on the Bulgarian Black Sea coast will be operated 2x-weekly (Tuesdays and Fridays) until September 5th, utilizing (BAU)’s 76Y-seat Dash 8-400s. No other carrier serves this airport pair.
July 2014: AirBaltic (BAU) began summer, 2x-weekly, Riga to Varna Boeing 737-300 service.
The European Commission (EC) has approved restructuring plans for airBaltic (BAU), Adria Airways (ADR), and (SAS) Scandinavian Airlines, ruling that none of the 3 airlines breached European Union (EU) state aid rules.
August 2014: airBaltic (BAU) reported a 1st-half net profit of +€14.49 million/+$19.8 million, reversing a net loss of -€12.45 million during the January to June period last year.
“The geopolitical turbulence in the East creates a very challenging market environment for airBaltic (BAU). Our transfer passenger numbers [are] going down,” (BAU) (CEO) Martin Gauss said. “Despite this, we have achieved significant cost savings through capacity management, cost controls, and efficiency gains.”
Responding to declining demand during the 1st half, (BAU) reduced capacity and discontinued flights to Odessa, Simferopol and Kaliningrad. (BAU)’s transfer yields also declined during the period, as passengers opted for greater point-to-point travel routes.
AirBaltic (BAU)’s 1st-half revenue fell -8% to €140.45 million. Passengers carried fell -6% year-over-year to 1.26 million. (RASK) was down -2.7% to €0.0726. Yield was €99.23, down -€2.33 from the year-ago period.
AirBaltic (BAU) begins 4x-weekly, Tallinn to Paris service on October 28 and to Amsterdam service on October 30, both operated with 737s.
As of June 30, airBaltic (BAU)'s fleet comprised 8 Boeing 737-300s, 5 737-500s and 12 Bombardier Dash 8-Q400 NextGen turboprops. The Riga-based airline serves 60 destinations.
September 2014: AirBaltic (BAU) and British Airways (BAB) will begin code sharing on September 23. The partnership will allow (BAU) passengers to reach cities served from London Gatwick and (BAB) passengers will have better access to Riga, Latvia.
October 2014: A consortium (made up of Latvian airline, airBaltic (BAU), Airbus (EDS) Air Traffic Management (ATM) subsidiary, Airbus ProSky, and Latvia’s Air Navigation Services provider, Latvijas Gaisa Satiksme (LGS)), has completed the Arrival Modernization for Better Efficiency in Riga (AMBER) project aimed at establishing new and greener arrival procedures at Riga Airport.
Launched in 2013 as part of the Atlantic Interoperability Initiative to Reduce Emissions, the main objective of the (AMBER) project was to introduce performance-based navigation (PBN) arrival procedures at Riga International Airport for airBaltic (BAU)’s Bombardier Dash 8-Q400 NextGen turboprop fleet. The new approach routes are shorter and introduce improved flight trajectories to avoid residential areas and reduce population exposure to noise. In addition, they facilitate the implementation of Continuous Descent Operations, which will further help reduce fuel consumption and emissions.
AirBaltic (BAU) said the new approach trajectory was up to -30 nautical miles shorter than previous approach paths, reducing CO2 emissions by up to -300 kg for every Dash 8-Q400 flight. When fully rolled out, (AMBER) is expected to generate CO2 emissions reductions of up to 5,000,000 kg per year for (BAU).
The new procedures have also been designed for use by commercial jets, such as Airbus (EDS) and Boeing (TBC) airplanes, so that any operator flying to Riga with the required airplane equipment will be able to use these enhanced arrivals.
(BAU) VP Flight Operations, Pauls Calitis said: “The new green procedures that have been established and flown with our Bombardier Dash 8-Q400 NextGen turboprops will be available to any airline flying to Riga with the relevant airplane equipment. The procedures will also be suitable for our brand new Bombardier (BMB) CSeries jets, which will be introduced into service in 2015.”
The (AMBER) project is being sponsored by Single European Sky (ATM) Research (SESAR) program. Performance-based approach is a key element supporting the decongestion of busy terminal areas and increasing air traffic management’s contribution to fuel efficiency in Europe.
November 2014: airBaltic (BAU) expanded its European network with the addition of 2 new routes during the course of last week. 1stly, on October 28th, (BAU) commenced 4x-weekly operations on the 1,843 km sector from Tallinn (TLL) to Paris (CDG), utilizing a mixed fleet of its 120Y-seat 737-500s and 144Y-seat 737-300s. Secondly, (BAU) the flag carrier of Latvia, launched 3x-weekly flights on the 1,381 km airport pair from Vilnius (VNO) to Amsterdam (AMS) on October 30th, using its 120Y-seat 737-500s. While the services to the French capital will face no direct competition, the route to Amsterdam is already served by Air Lituanica (LUA)’s daily flights.
December 2014: AirBaltic (BAU) is to start flights between Riga and Dubrovnik next year. From May 26th, (BAU) will serve the Croatian holiday destination once per week, with a Boeing 737-300.
AirBaltic (BAU) will be the Riga to Dubrovnik route's sole operator.
airBaltic (BAU) expanded its winter seasonal offering with a new service from its Riga (RIX) base to Tatry (TAT) in Slovakia on December 13th. The 921 km sector to the famous ski resort in the highest mountain range of the Carpathian Mountains will be served weekly (Saturdays) until March 7th, using (BAU)’s 142Y-seat 737-300s. No other operator servers this airport pair. Poprad in the High Tatras, is an excellent and affordable skiing destination, which will benefit from tourism opportunities created by the new airBaltic (BAU) route.”
March 2015: AirBaltic (BAU) begins weekly, Riga to Pisa on June 13. (BAU) also begins weekly, Bombardier Dash 8-Q400 NextGen Frankfurt and Dortmund to Heringsdorf, Usedom Island on May 9.
April 2015: Latvian national carrier, airBaltic (BAU) is set to receive an increase in its share capital following a decision at its annual general meeting.
May 2015: News Item A-1: airBaltic (BAU) expanded its European offering with the addition of 4 new routes, all of which are operated by (BAU)’s 73Y-seat Dash 8-Q400s. (BAU), the Latvian flag carrier introduced its 3rd and 4th routes from Tallinn (TLL) to Berlin Tegel (TXL) and Vienna (VIE) on May 6 and 7, respectively, (see attached - - "BAU-2015-05 - TLL to VIE and TXL.jpg) 2 airport pairs already served by Estonian Air (ENA)’s 3x-weekly departures. In addition, (BAU) commenced 2 new routes to Heringsdorf (HDF) in Germany on May 9th, from Dortmund (DTM) and Frankfurt (FRA). Commenting on the route launch to Vienna, Christophe Viatte, (CCO), (BAU), said: “In cooperation with our code share partner Austrian Airlines (AUL), we can now offer travelers from Tallinn, another direct link to the heart of Europe and beyond. We are delighted to be announcing our route to Vienna, improving links between the Baltic capitals and European cities, and strengthening (BAU)’s position as the carrier of the Baltic region.”
These routes are as follows:
Dortmund (DTM) and Frankfurt (FRA) to Heringsdorf (HDF), weekly;
Tallinn (TLL) to Berlin Tegel (TXL) and Vienna (VIE), both 4x-weekly, vs Estonia Air (ENA) 3x-weekly.
News Item A-2: Lithuanian carrier, Air Lituanica (LUA) ceased flying from noon Friday, May 22nd local time. The small airline, whose website credits it with operating an Embraer E175, an Embraer ERJ-145 and an ATR 42 said its management had decided to stop operations.
The final flights operated from Vilnius, the Lithuanian capital, were to Amsterdam, Tallinn, and Paris. Afternoon services to Berlin, Prague, Brussels, and Stockholm were canceled.
Air Lituanica (LUA), which began services in 2013, said it had reached an agreement with airBaltic (BAU), from neighboring Latvia, to carry passengers booked on (LUA)’s services over the next eight days.
Attempts to reach Air Lituanica (LUA) by telephone were unsuccessful. As recently as early this year, (LUA) had been announcing expansion plans.
AirBaltic (BAU) said it would step into the breach and launch a series of new services from Vilnius from early September to 6 European destinations served by the defunct Lithuanian carrier. It already operates services between the Latvian capital, Riga, and Vilnius and also a Vilnius to Amsterdam service.
(BAU) confirmed that it would accept Air Lituanica (LUA) passengers for the next week and that passengers booked for flights beyond that date, would be offered “rescue fares” to their destinations.
“Our home market for airBaltic (BAU) is Latvia, Lithuania, and Estonia,” (CEO) Martin Gauss said. “We will consolidate and strengthen our services in our home market by offering more direct flights. We will rescue stranded passengers in the first days following the suspension of (LUA) flights and will offer special rescue fares for customers booked for flights later in the summer.”
In recent years, (BAU) has suggested that it would be sensible to have a single airline serving the small Baltic States. “Today’s event in Vilnius is a strong signal that the 3 Baltic countries should take a common approach to their aviation, to best support travelers, new economic activity, and new jobs,” Gauss said.
Following Air Lituanica (LUA)'s cessation of services, Estonian Air (ENA) announced it would nearly double frequencies on its Tallinn - Vilnius route from 6 to 11, beginning Monday. “We are planning to find out, together with the Lithuanian Ministry of Economic Affairs, what are the possibilities for future co-operation to connect Vilnius with the rest of European cities,” (ENA)'s (CCO) Indrek Randveer said.
June 2015: News Item A-1: airBaltic (BAU) introduced 2 new routes from Riga (RIX) this week, starting on June 12 to Rhodes (RHO) in Greece. Flights will operate on the 2,300 km sector weekly with a Friday operation, using a mixture of (BAU)’s 737-300s and 737-500s. The airport pair will see direct competition from FlexFlight, who also operate a weekly schedule. On June 13, (BAU) introduced its 2nd launch of the week, this time to Pisa (PSA) in Italy. The city pair will also operate weekly with a Saturday operation, facing no direct competition. The 1,753 km sector will also be flown using a mixture of (BAU)’s 737 variants. Commenting on the launch of flights to Pisa, airBaltic (CCO) Christophe Viatte, said: “Pisa’s Leaning Tower, historical heritage, and cultural wealth are known all over the world. We are pleased to be adding it to the airBaltic (BAU) route map, offering Baltic travelers the chance to spend their summer holidays in the heart of Tuscany.” Both routes will operate until mid-September.
News Item A-2: Air Baltic (BAU) is planning to firm up its 7 additional CS300 options, Chief Executive Officer (CEO) Martin Gauss, has disclosed. Earlier this year, the Latvian carrier said it would issue a Request For Proposals (RFP) for the sale/leaseback of its CS300 fleet from the 3rd quarter of this year onwards.
As the type's launch operator, Air Baltic (BAU) expects its 1st CS300 to be delivered from Bombardier (BBA, Montréal Trudeau) in September next year with an additional 2 airframes expected by the end of 2016.
No route plans have yet been revealed, though Gauss did state during the recently ended Paris Airshow 2015 at Paris Le Bourget that the C-Series' lower operating costs and longer range would allow his airline to ply routes that are not currently possible.
(BAU) currently operates 25 airplanes and serves 33 countries to 62 destinations, on 72 routes and 138 daily flights.
July 2015: AirBaltic (BAU) has started a weekly, Riga to Rhodes service, using a Boeing 737-300. (BAU) has also begun 2x-weekly, summer season route from Riga to Thessaloniki with 737-300s.
August 2015: AirBaltic (BAU) will wet-lease an ATR 72-200 from (DAT) - Danish Air Transport for the duration of September.
September 2015: News Item A-1: airBaltic (BAU) launched a total of seven new routes on September 1st and 2nd from its Riga (RIX) and Vilnius (VNO) bases. With the new routes, also comes the celebration of (BAU) being the 1st scheduled operator to Radom (RDO). Services on the 641 km sector connecting the Polish city with Riga will operate 3x-weekly using (BAU)’s Dash 8-Q400s. Of the 7 new city pairs being offered by airBaltic (BAU), only 2 are already served by existing carriers. The average frequency of the new routes is 5x-weekly.
Routes as follows (all using DHC-8-400):
Riga (RIX) to Radom (RDO), 3x-, to Stockholm Brommas (BMA) 5x-;
Vilnius (VNO) to Brussels (BRU) 4x-, vs Brussels Airlines (DAT)/(EBA) 5x-, to Helsinki (HEL) 5x-, vs Finnair (FIN) 14x-, to (BMA) 12x-, to Berlin Tegel (TXL) 3x-, and to Paris (CDG) 3x-.
It will also begin a weekly, Riga to Salzburg on December 26 using a Boeing 737-500. AirBaltic (BAU) also launches 12x-weekly Tallinn to Stockholm (BMB) Dash 8-Q400 NextGen service on March 27.
October 2015: News Item A-1: AirBaltic (BAU) increases service on Stockholm (ARN) to Riga and to Vilnius to 5x-weekly with Bombardier (BMB) Dash 8-Q400 NextGen aircraft beginning October 25.
News Item A-2: Latvia decides on the partial privatization of airBaltic (BAU) on October 20, which will in turn dictate the funding of (BAU)’s new Bombardier CSeries aircraft and the pace of its Baltic region expansion.
News Item A-3: "Ukraine Extends Ban to All Russian Airlines on October 25" by (ATW) Polina Montag-Girme, October 15, 2015.
The Ukrainian State Aviation Administration announced a total ban of all Russian airlines from flying into Ukraine as of October 25, in a back-and-forth political move.
On September 28, Ukraine announced it would ban Russian airlines from flying into Ukraine from October 25. The list included nearly 20 Russian airlines, among them were the biggest carriers such as Aeroflot (ARO) and (S7) Airlines (SBR). The only big airline not included on the Ukrainian list was UTair (TYU), which would have been able to increase its flights to Kiev.
On September 29, Rosaviatsia, in turn, said it will ban Ukrainian airlines from flying into Russia on October 25. Ukrainian authorities said the latest measure was because Russia’s Federal Air Transport Agency, Rosaviatsia, “failed to provide a response explaining the reasons for flight limitations for Ukrainian carriers into Russia.”
Belarus’ Minsk-based Belavia (BLV), as well as Latvian Riga-based airBaltic (BAU), will benefit from the situation as they are able to offer transfer flights through their bases between Moscow and Kiev.
News Item A-4: The Latvian government has deferred its decision on the privatization of up to 49% of airBaltic (BAU) until November 3.
News Item A-5: AirBaltic (BAU) (CEO), Martin Gauss has sought reassurance from Bombardier (BMB) on the future of the CSeries program following the breakdown of partnership talks between Airbus (EDS) and Bombardier (BMB).
While airBaltic (BAU) remains very keen on the CS300 as the ideal replacement for its Boeing 737 fleet, Gauss is concerned about the lifespan of the program. AirBaltic (BAU) is due to take its first CS300 in September 2016 and is the launch customer for the variant.
“We would like a clear statement from Bombardier (BMB) on the status of the program,” Gauss said on the sidelines of the European Regions Airline Association (ERAA) meeting in Berlin. “I want certainty, not only on deliveries (which I think they will achieve) but that they will still be supplying and building these aircraft in five years’ time.”
AirBaltic (BAU) originally signed a letter of intent (LOI) for 10 CS300s, plus purchase rights on a further 10, at the 2012 Farnborough Airshow. The deal was firmed in December 2012. The order was further boosted at the 2014 Farnborough Airshow, when Bombardier (BMB) revealed (BAU) had firmed three options, taking its total commitment to 13 CS300s plus seven options.
Despite his concerns, Gauss said the performance of the CS300 is “exactly what (BAU) wants” and he remains keen to exercise his seven outstanding CS300 options.
During the (ERAA) conference, Bombardier (BMB) reiterated that it is 100% committed to the CSeries, which is due to enter service with CS100 launch customer Swiss International Air Lines (CSR) in the first half of 2016.
(BMB) has booked 243 firm orders for the CSeries to date.
November 2015: Latvia has approved plans to sell 20% of airBaltic (BAU) to German businessman, Ralf Dieter Montag-Girmes for €52 million/$57 million and agreed to invest a further €80 million in (BAU) directly. Ralf Dieter Montag-Girmes has described his 20% investment in airBaltic (BAU), as a “unique business opportunity.”
The Latvian parliament has agreed to increase the equity of national carrier airBaltic (BAU) by €80 million/$87 million as part of a deal to consolidate and increase its operations in the Baltic region.
Parliament authorized the country’s Finance Minister to increase the appropriation for his department by up to +€80 million, which will then be funneled into (BAU).
“The appropriation is needed to ensure further development of the national airline,” parliament said in a statement.
It follows on from an agreement last month for a further €52 million to be provided by German investor, Ralf Dieter Montag-Girmes, whose short-term loan will be converted into a 20% share of (BAU)’s stock. The new infusion of cash from the government will similarly be converted into equity.
The increase in equity will pave the way for airBaltic (BAU) to start to take delivery of its planned new fleet of Bombardier CS300s, for which (BVAU) is the lead customer. If (BAU)’s previously negative equity had not been resolved, it would not have been allowed to have the CS300s on its balance sheet and would have had to acquire them through a sale-and-leaseback deal.
A rider to the deal from the Latvian parliament specified that (BAU) and its affiliated companies “are prohibited from purchasing, renting or otherwise utilizing equipment produced by military industrial complexes and their affiliates subject to sanctions imposed by the European Union (EU) or the international community and ratified by Latvia.”
This is a clear reference to Russia, which at one point was thought to be in the running to supply (BAU) with the Sukhoi SSJ100 SuperJet.
December 2015: News Item A1: "Latvia approves cash injection for airBaltic (BAU)" by (ATW) Alan Dron, December 4, 2015.
AirBaltic (BAU) will sign an investor agreement with German businessman, Ralf Dieter Montag-Girmes in January, once it has “closed all matters related to its Bombardier (BMB) CS300 order.”
On November 3, Latvia’s cabinet approved the sale of a 20% stake in airBaltic (BAU) to private investor, Montag-Girmes for €52 million/$57 million and agreed to invest a further €80 million in (BAU) directly.
Montag-Girmes, who is active in aircraft leasing, property development and rentals, was initially seeking a 25.1% blocking minority stake in return for an investment not exceeding >€60 million, but the stake was slimmed to 20% during the negotiations.
In an update released on December 22, (BAU) said the investor agreement will be signed in January. Following the deal, Montag-Girmes will own 20% of airBaltic (BAU), and the Latvian state will hold 79.99%.
However, first, (BAU), the Latvian carrier will finalize preparations for the 17 Bombardier CSeries CS300s it has on order. (BAU) is due to receive its first CS300 in September 2016 as launch operator of the variant. “We have achieved remarkable results for airBaltic (BAU) in the past few years, and, with the new investment, we can now focus on our expansion and consolidation in the Baltic region. The new equity will be used for investing into new aircraft, rather than leasing them,” (BAU) (CEO) Martin Gauss said.
This will pave the way for (BAU)’s "Horizon 2021 business plan, which will see it expand operations in Tallinn, Estonia, and Vilnius, Lithuania. This is particularly relevant following the recent closure of Estonian Air (ENA).
In summer 2015, airBaltic (BAU) launched 14 new routes, marking its most rapid expansion since it restructured and returned to profit. This summer it operated six routes from Lithuania and four from Estonia, but it is planning to grow this to 11 frequent scheduled routes from each of the two countries by 2021. This will join airBaltic (BAU)’s 60 scheduled routes from its Riga, Latvia home base.
Latvia is continuing to seek a strategic equity investor (ideally a European airline) for some of its remaining shares.
News Item A-2: airBaltic (BAU) on December 26 started services from Riga (RIX) to Salzburg (SZG) and Verona (VRN). The 1,255 and 1,566 km sectors will operate weekly on Saturdays with (BAU) utilizing its 737-300s on both airport pairs. Neither of the seasonal routes will face direct competition. For 2016, the only new route so far planned to launch from Riga operated by airBaltic (BAU) is on May 28 to Reykjavik/Keflavik, a seasonal route which is currently scheduled to operate 2x-weekly until the end of September.
January 2016: AirBaltic (BAU) begins Riga - Reykjavik on May 28.
February 2016: The Latvian government has signed the agreement to sell 20% of airBaltic (BAU) to German investor Ralf-Dieter Montag-Girmes, securing (BAU)’s planned €132 million/$144.7 million capital boost.
March 2016: News Item A-1: With a combined population of around 6.2 million people, the Baltic States of Estonia, Latvia and Lithuania cover an area roughly half the size of Germany. The capital cities of each nation (Tallinn, Riga, and Vilnius respectively) are each served by a single major airport. Apart from these airports, the only others in the 3 countries to have significant scheduled services are Kaunas and Palanga, both of which are in Lithuania.
In 2001, the 3 main airports combined served fewer than 2 million passengers per annum. Last year, the same 3 airports handled just <11 million passengers. Between 2001 and 2004, there was little to choose between Riga, Tallinn and Vilnius in terms of demand, but since 2005, Riga has pulled into a clear lead thanks to the growth of airBaltic (BAU).
In 2009, Riga was handling 3x- as many passengers as either of the other 2 airports. However, since 2010, Riga has experienced relatively modest growth (just +11%) while Vilnius’s traffic has increased by almost +150% and Tallinn’s is up by almost +60%. If we include Kaunas and Palanga in the traffic statistics, then the airports of the Baltics handled a total of just >11.5 million passengers last year. For comparison, among individual airports across Europe, that would fit in between Warsaw (11.2 million) and Nice or Prague (both with 12.0 million passengers).
* airBaltic leads Ryanair (RYR) and Wizz Air (WZZ)
In terms of scheduled seat capacity in 2015, airBaltic (BAU) was the leading carrier thanks to its Riga hub. However, it is also among the top 3 carriers at both Vilnius and Tallinn.
The government-owned airline recently announced a new major shareholder, a German investor who has purchased a 20% stake in the airline for 52 million Euros.
(BAU) will also be the launch customer this summer for Bombardier’s CS300 series aircraft, which will be used to replace (BAU)’s 12 existing 737-500s and 737-300s. airBaltic (BAU) also has 12 76-seat Q400s which it uses on regional routes and which replaced Fokker F 50s which the airline had been operating since late 1998.
Ryanair (RYR) is a clear 2nd with a base at Kaunas as well as operations from Riga, Vilnius and Tallinn. This summer will see (RYR), the (ULCC) also launch flights from Palanga to London Stansted. (RYR) will have a 2-aircraft base at Vilnius for the start of W16/17, with an announcement made during the recent CONNECT conference. 3rd-ranked Wizz Air (WZZ) has a base in Vilnius, a presence at both Riga and Kaunas and will also start Palanga flights this summer, but to London Luton.
Sadly 2 of last year’s top 15 airlines both ceased operations during the last 12 months with Lithuania losing Air Lituanica (LUA) and Estonia losing Estonian Air (ENA). While the Estonian government quickly set up a replacement company, Nordic Aviation Group, now operating as "Nordica" (NAG) (with the assistance of Adria Airways (ADR)), Lithuania has not. Given that in the last few years, the country has seen the demise of flyLAL (in January 2009), Star1 (in October 2010) and now Air Lituanica (LUA) (which launched in June 2013), the issue of whether the country can really sustain a national flag-carrier needs to be considered carefully. Given that (much-larger) near neighbors Denmark, Norway and Sweden ‘share’ a flag-carrier, suggests that something similar may be appropriate for the Baltic States.
A total of 30 scheduled airlines operated at least 20 flights into 1 or more of the Baltic States airports. Among those outside of the top 15 are Aegean Airlines (CRM) (linking Athens with Tallinn), easyJet (EZY) (serving Tallinn from London Gatwick), and SWISS (CSR) (connecting Zurich with Riga), as well as another airline that is no longer operating, Transaero Airlines (TRX).
* UK and Germany battle for #1 country market status
The leading country markets from Baltic airports for scheduled services in 2015 were the UK and Germany, with little to choose between them. Both also reported almost identical increases in seat capacity compared with 2014. Each of the Baltic countries appears in these rankings as there are links between each of them. The 4 Nordic nations are ranked 4th to 7th, with Norway having a significant lead over the other 3 countries, and may move past Russia into 3rd place in 2016.
* airBaltic (BAU), Ryanair (RYR) and Vueling (VUZ) lead new route launches for S16.
Apart from the 2 previously mentioned new routes to London from Palanga, the following routes have been announced as starting this summer from the Baltic airports:
* Riga (RIX): Aegean Airlines (CRM) to Athens; airBaltic (BAU) to Reykjavik/Keflavik; Vueling (VUZ) to Barcelona and Rome;
* Tallinn (TLL): airBaltic (BAU) to Amsterdam, Stockholm Bromma and Vilnius; Nordica (NGA) to Berlin Tegel, Edinburgh, Odessa, Paris (CDG), Rijeka, and Vienna; Vueling (VUZ) to Rome;
* Vilnius (VNO): airBaltic (BAU) to Tallinn; Germania (GER) to Zurich; Ryanair (RYR) to Berlin (SXF), Birmingham, and London Luton; Vueling (VUZ) to Barcelona.
News Item A-2: AirBaltic (BAU) begins Riga to Reykjavik on May 28.
News Item A-3: The 1st CSeries CS300 for launch operator airBaltic (BAU) is on the final assembly line at Bombardier (BMB) Commercial Aircraft’s plant in Mirabel, near Montreal.
airBaltic (BAU), the leading airline in the Baltics, will receive the 1st of 13 firm orders for Bombardier CS300 aircraft in the 2nd half of 2016. They will be used to replace (BAU)’s 12 737s (a mix of 737-500s and 737-300s). airBaltic (BAU)’s closest rivals in the region are Ryanair (RYR) and Wizz Air (WZZ).
At the same time, the 1st aircraft for CS100 launch operator Swiss International Air Lines (CSR) is complete and has been powered up at Mirabel ahead of the 1st flight.
The CS100 is on track to enter service with SWISS (CSR) in June, and the CS300 with airBaltic (BAU) in the 2nd half of the year, (BMB)r VP CSeries Program, Rob Dewar said.
The 1st production CS100, aircraft (P1), has begun route-proving flights for SWISS (CSR). Based in Zurich, P1 has so far flown to Hannover and Brussels, flown by Bombardier (BMB) pilots (FC) but with (CSR) proving ground support.
Initial flights are there-and-back, but the CS100 will shortly begin operating 6x-daily between different destinations, as it will in SWISS (CSR) service, to iron out any issues.
P1 has completed 450 hours of a 600-hour extended function-and-reliability test phase to be completed before entry into service (EIS). There have been snags, but no dispatch interruptions so far, Dewar said.
P1 is in the Build 6 certification standard, and Bombardier (BMB) will shortly begin flying the (EIS) standard, Build 7. This cleans up nuisance warnings and introduces capabilities including Category 2B landings, hot-and-high runways and steep approaches.
The 1st of 2 CS300 flight-test aircraft, (FTV7), is now at around the 500-hour mark. The 2nd joined the flight test program at Mirabel March 3 and is the 1st with an interior. Dewar said the aircraft was on track for certification about 6 months after the CS100, which received Transport Canada approval in December.
Nine CSeries have been built so far, he says, and CS100s up to serial number (50015) have progressed through fuselage and wing join at Mirabel. The 1st CS300 for (BAU) has completed fuselage join.
(BMB) plans to deliver 15 - 20 CSeries this year to SWISS (CSR), airBaltic (BAU) and other operators. The CS100 can seat 100 - 133 passengers, but is typically being specified with around 117 seats dual-class. Able to accommodate up to 160, the longer CS300 is being specified typically with 148 seats single-class and 137 dual.
April 2016: "AirBaltic Again Boosts Bombardier CSeries Order" by (ATW) Alan Dron, April 12, 2016.
Latvian flag carrier and launch operator of the Bombardier CSeries CS300, airBaltic (BAU) has again increased its order for the new Canadian regional jet. It has firmed the remaining 7 options from its initial order of 10 firm and 10 options placed in December 2012.
It had already firmed up 3 of the 10 options in February 2014.
This latest order is valued at approximately $506 million at list prices.
(BAU) will be the 1st customer to operate the CS300 when it takes delivery in the 2nd half of 2016.
The CS300 is the stretched version of the initial CS100 that is due to enter service in the next few months with launch customer, Swiss International Air Lines (CSR).
AirBaltic (BAU) is transitioning to an all-Bombardier fleet; it already has 12 Dash 8-Q400 turboprops.
“Our fleet modernization continues as we increase our all-new CS300 aircraft to a fleet of 20 technologically-advanced jetliners in order to support our "Horizon 2021" business plan,” (BAU) (CEO) Martin Gauss said. “This will substantially improve the connectivity of the Baltic region with Western Europe and the Eastern markets (all of which will help stimulate the economies of Latvia, Estonia, and Lithuania, and create new jobs). The CS300 will improve our passenger experience and convenience as we position ourselves for growth, reaching new destinations due to the increased capabilities of our new jets.”
May 2016: News Item A-1: Latvian flag carrier, airBaltic (BAU) achieved a net profit of +€19.5 million/+$22.2 million for 2015, almost doubling its surplus from the previous year’s +€10.7 million, (BAU) said on May 12.
(BAU) “has been profitable for 3 consecutive years. This is an excellent foundation to build on, as our "Horizon 2021" business plan takes full motion this year,” (CEO) Martin Gauss said.
Revenue for 2015 was €285 million. (BAU) carried 2.6 million passengers, with a load factor of 71% LF. No comparative figures for 2014 were given.
(BAU)’s "Horizon 2021" business plan has been boosted with an increase in the airline’s share capital to +€256 million, following the arrival of a new strategic shareholder, German investor, Ralf-Dieter Montag-Girmes, who took a 20% stake in the airline.
The financial injection will help airBaltic (BAU) to modernize its fleet and introduce 20 Bombardier (BMB) CS300 jets, with the first aircraft arriving later this year. (BAU) will be launch customer for the stretched CS300. It will phase out its Boeing 737-300s and 737-500s and, together with its Dash 8-Q400 turboprops, will move to an all-Bombardier (BMB) fleet.
“Our all-Bombardier (BMB) airplane fleet will be instrumental in improving the connectivity of the Baltic region with Western Europe and the Eastern markets,” Gauss said. “As part of the "Horizon 2021" plan, airBaltic (BAU) will operate 11 direct routes out of Tallinn and Vilnius in the next five years, in combination with convenient transfers via Riga.”
The Latvian flag carrier has stepped up efforts to become the dominant airline in the Baltic region, by expanding services from neighboring Lithuania and Estonia.
August 2016: News Item A-1: Hong Kong Airlines (CRY) and Royal Brunei Airlines (RBA), the national flag carrier of Brunei Darussalam, signed a code share agreement to provide travelers with enhanced connections in Asia.
Under the agreement, (CRY)’s “HX” code will be placed on (RBA) daily flights between Hong Kong and Bandar Seri Begawan, the capital and largest city of the Sultanate of Brunei. At the same time, (RBA) will place its “BI” code on (CRY)’s daily flights between Hong Kong and onwards to Tokyo, Japan.
October 2016: News Item A-1: airBaltic (BAU) has joined Airlines for Europe (A4E), adding to the lobbying group’s growing number of carriers.
(A4E) has been steadily gaining members since its creation in January 2016 and has been campaigning on a variety of issues affecting the airline industry, notably air traffic control (ATC) strikes, removing what it regards as unreasonable taxes and lowering the cost of using airports in the 28-nation European Union.
Riga-based airBaltic (BAU) is the 1st carrier from Eastern Europe to join the grouping, which has quickly become the continent’s largest airline lobby organization. It is unusual in that it brings together a mix of full-service, low-cost and leisure carriers.
Some members of the pre-existing Association of European Airlines (AEA) have departed in favor of (A4E), while the European Low-Fares Airline Association announced in September 2016 it would close because of defections to the new organization.
AirBaltic (BAU) is an (AEA) member, but there was no word on whether, like some (A4E) recruits, it would resign from the latter organization as a result of its new membership.
(A4E)’s membership now consists of Greece-based Aegean Airlines (CRM), airBaltic (BAU), Air France (AFA) (KLM), UK low-cost carrier (LCC) easyJet (EZY), Finnair (FIN), International Airlines Group (IAG), British (LCC) Jet2.com (JT2), Germany’s Lufthansa Group (DLH), Norwegian (NWG), Irish (LCC) Ryanair (RYR), (TAP) Portugal, and Spanish (LCC) Volotea (VOZ), and it says it plans to grow further.
“Representing the Eastern European hemisphere we will deliver new, important insights of smaller but fast growing markets within the European Union (EU),” airBaltic (BAU) (CEO) Martin Gauss said. “I am convinced that this will be to the benefit of all European passengers.”
“The European aviation market and its airlines are providing unprecedented mobility to citizens and businesses,” (A4E) Managing Director Thomas Reynaert noted. “Air transport is thus an enabler of economic activity and contributes significantly to economic growth and job creation. It is on (A4E) and its growing membership base to ensure the importance of our sector is acknowledged in Brussels and the member states.”
News Item A-2: Bombardier Commercial Aircraft received type validation from (EASA) for CS300 in preparation for 1st delivery to AirBaltic (BAU) in (4Q) 2016. The 1st 6 pilots (FC) completed an initial type rating course and the CS300 successfully conducted route-proving exercises out of Riga.
December 2016: News Item A-1: Bombardier (BMB) delivered the 1st CS300 aircraft to launch operator airBaltic (BAU) on November 28 and was unveiled in Riga on December 1. The CS300 is the larger variant of (BMB)’s CSeries aircraft, which is designed to carry between 130 and 150 passengers in a 2-class layout.
News Item A-2: The Bombardier (BMB) CS300 has gained type validation by the (FAA), meaning both variants of the CSeries have been certified by Transport Canada, the European Aviation Safety Agency (EASA) and the (FAA).
The (FAA) has also granted the CS100 and the CS300 the Same Type Rating (STR), a designation that allows pilots (FC) to transfer between the 2 variants with minimal training, providing cost savings for airlines that operate both. “These airworthiness validations by international authorities recognize the exhaustive process and excellent work done by Bombardier (BMB), in conjunction with Transport Canada, who awarded the CSeries aircraft their original aircraft type approvals,” (BMB) VP Product Development & Chief Engineer François Caza said.
The (FAA)’s approval of the CS300 came on the same day Latvian carrier airBaltic (BAU) placed the 1st CS300 into revenue service on the Riga - Amsterdam route.
News Item A-3: INCDT: "Incident: Air Baltic Dash 8-Q400 at Riga on December 28, Unsafe Gear" by Simon Hradecky, "The Aviation Herald" December 29, 2016.
An Air Baltic (BAU) Bombardier (BMB) Dash 8-Q400 (YL-BBT) performing flight BT136 from Copenhagen (Denmark) to Riga (Latvia) with 64 passengers and 4 crew, was on final approach to Riga's runway 36 when the crew initiated a go-around reporting a gear indication. The aircraft entered a hold while the crew was working the checklists successfully extending and locking all gear. The aircraft landed safely on runway 36 about 45 minutes after the go-around.
Latvia's accident and incident investigation reported a computer malfunction prevented the gear from being released. Using the backup, it was possible to extend the landing gear. The computer is being replaced.
January 2017: News Item A-1: Magnetic (MRO) acquired an airBaltic (BAU) contract to provide Bombardier Dash 8-Q400/CS300 wheel and brake maintenance.
News Item A-2: airBaltic (BAU) has received its 2nd Bombardier CS300 (YL-CSB), after becoming the launch customer for the larger CSeries variant in late 2016. The 2nd CS300 aircraft departed Montreal Mirabel shortly before midnight local time on December 31, 2016 and arrived at (BAU)’s Riga hub following a 7-hour and 11-minute nonstop flight. “The modernized fleet will ensure growth of (BAU) with at least 10 additional routes and +16% more tickets.
February 2017: Latvian carrier airBaltic (BAU) plans to launch 4x-weekly Riga to Abu Dhabi Bombardier CS300 service beginning October 29, in cooperation with Etihad Airways (EHD), (BAU) the Riga-based carrier announced on February 24.
AirBaltic (BAU) (CEO) Martin Gauss said the CS300 will be able to “fly longer distances and reach airports that we were not able to serve with our fleet before.”
The CS300 launch customer took delivery of its 1st of the type on November 28, 2016, and launched its 1st flight from Riga to Amsterdam on December 14. (BAU) received its 2nd CS300 on December 3.
AirBaltic’s (BAU)'s fleet also includes 12 Bombardier Dash 8-Q400s and 13 Boeing 737s.
March 2017: "Engine Shortage, Airframe Tweaks Prompt CSeries Delivery Pause" by Flightglobal Pro, Stephen Trimble Washington DC, March 3, 2017.
Bombardier (BMB) has halted deliveries of the CSeries aircraft for 2 months to refine the production system and upgrade the aircraft configuration, while the supply of Pratt & Whitney (PRW)’s geared turbofan engines remains a bottleneck, (BMB) (CEO) Bellemare told Flightglobal.
The last CSeries aircraft delivered (a CS300) was delivered to Air Baltic (BAU) on December 31. A month ago, (BMB) officials said the delivery of the 6th CS100 (and 8th CSeries overall) to Swiss (CSR) would occur “shortly,” but the aircraft remains parked outside the final assembly line in Mirabel, Canada.
The ongoing delivery hiatus increases pressure on (BMB) to meet a commitment to ramp CSeries deliveries this year to 30 - 35 aircraft, a +428 - +500% jump compared to the 7 deliveries made last year.
On the sidelines of the USA Chamber of Commerce Aviation Summit on March 2, Bellemare explained the delivery stoppage was planned. “We’re taking advantage of this lateness in engines to take the opportunity to upgrade the aircraft, upgrade the assembly line and get ready for more volume,” Bellemare said.
Bombardier (BMB) originally planned to deliver 15 CSeries aircraft in 2016, but in September reduced the forecast to 7 while blaming a shortage of engine deliveries from (P&W).
The ramp-up of the (P&W)’s geared turbofan engine family has been slowed by a critical shortage of several parts, including the unique hybrid metallic fan blades. In comments made last year, United Technologies (CEO) Greg Hayes said the fan blades have proved harder to make than (P&W) expected.
But the opening of new fan blade factories in Japan and Michigan is expected to eliminate the parts shortage, allowing (P&W) to meet its goal of delivering 350 - 400 engines in 2017. Hayes explained that about 50 of those engines will be needed as customer spares. Bombardier (BMB) will need at least 60 - 70 engines to meet its goal of delivering 30 - 35 aircraft. That leaves 230 - 290 engines left over for (P&W)’s other geared turbofan customers, which includes the Airbus (EDS) A320neo now in service and the Embraer E190-E2 that remains in testing.
While Bombardier waits for more engines, the company is improving aircraft on the assembly line to avoid taking delivered units out of service as improved components become available. “Instead of producing aircraft that would actually need a lot of retrofit in the field, we could manage that because, like we said, the engine delivery schedule was back-end loaded,” Bellemare said. Bellemare described the aircraft and production system improvements as minor tweaks that fall short of a block-point upgrade, which is scheduled to come later.
April 2017: Danish entrepreneur Lars Thuesen, who is 100% owner and Chairman of Danish wet-lease operator Jet Time (JTM), has acquired 20% of airBaltic (BAU) from German businessman Ralf Dieter Montag-Girmes.
Private investor Montag-Girmes, who has a background in corporate finance, originally acquired the 20% stake in 2015 following a 4-year privatization process.
Montag-Girmes already knew former Scandinavian Airlines (CFO) Thuesen indirectly and he said the sale, which was completed last week, was “very straightforward.” “This was a very large investment, which ate up a lot of liquidity,” Montag-Girmes said. “When this deal came along, it suited my plans very well. The sale has nothing to do with the performance of (BAU), quite the contrary. Everything is going very well and (BAU) is performing well above a very aggressive budget.”
Likewise, airBaltic (BAU) is very satisfied with the performance of its Bombardier CSeries 300s, which are proving very popular with passengers and performing above manufacturer specifications, Montag-Girmes said.
Jet Time (JTM) already performs Boeing 737 wet-lease work for airBaltic (BAU) under a contract that was secured independently of the ownership change.
AirBaltic (BAU) is looking to become the reference carrier for the Baltic region under its Horizon 2021 strategy. Under the leadership of airBaltic (BAU) (CEO) Martin Gauss, (BAU) has returned to profitability and is rapidly expanding its operations in Tallinn, Estonia and Vilnius, Lithuania.
The Latvian government is still seeking a strategic investor for airBaltic (BAU), as it looks to further privatize the airline and strengthen operations from the country’s main Riga hub.
May 2017: News Item A-1: airBaltic (BAU) expanded its presence in the UK, Switzerland and Norway by launching flights to Aberdeen (ABZ), Geneva (GVA) and Stavanger (SVG) from Riga (RIX). (BAU) already serves London Gatwick in the UK, Zurich in Switzerland and Oslo Gardermoen in Norway from its Latvian hub. Flights to Aberdeen and Stavanger began on May 2, with Geneva services beginning 2 days later. The 1,571 km route to Aberdeen marks the end of a 3-year hiatus for airBaltic (BAU) on the route from Riga, with it having last served the city pair in September 2014.
Along with Aberdeen, the 1,703 km link to Geneva and 1,101 km sector to Stavanger will be flown 3x-weekly. While Aberdeen and Geneva will be served on a mixture of (BAU)’s 737-300s and 737-500s, flights to Stavanger will operate on Dash 8-Q400s. Neither of the three routes launched by (BAU) will face direct competition.
(BAU)’s next route launch from Riga will take place on May 11, the day on which it will begin flights to Catania in Sicily.
News Item A-2: airBaltic (BAU) commenced its latest route from Riga (RIX) on May 11, beginning a weekly (Thursdays) service to Catania (CTA). The 2,260 km sector will be flown by (BAU) on its fleet of CS300s making it the 1st new route anywhere in the world to be launched using this aircraft type. No other carrier currently operates the city pairing.
Wolfgang Reuss, Senior VP Network Management at (BAU) said of the new route: “We are delighted to add Catania to our summer season flights and to offer yet another sunny destination with convenient connections. Catania is the 2nd largest city in Sicily, which in turn is the largest island in the Mediterranean Sea and it is a perfect place for summer holidays.” The news of Catania joining (BAU)’s network follows on from the airline’s recent launch of flights from Riga to Aberdeen, Geneva and Stavanger.
June 2017: "AirBaltic to Take 6th and 7th CS300 within 4 Days" by (ATW) Kurt Hofmann firstname.lastname@example.org, June 30, 2017.
airBaltic (BAU) expects to receive 2 more Bombardier CS300s by mid-July, 8 months after becoming the launch customer for the larger CSeries variant. (BAU) plans to receive its 6th Bombardier CS300 on July 10 and its 7th on July 14. “Within 4 days, 2 additional CS300s will join our fleet,” airBaltic (BAU) Chairman & (CEO) Martin Gauss said on the sidelines of an Airlines for Europe (A4E) event in Brussels, June 29. “We expect aircraft number 8 later this year. This will be then the last one for 2017.”
By the end of 2019, (BAU) plans to have 20 Bombardier CS300 aircraft in its fleet. “The CS300 became already our workhorse“, Gauss said, adding within the next 2 years employee training will continue as new aircraft join (BAU).
During the transition period as the airline switches from Boeing 737s to CS300s, 3 additional wet-leased aircraft will operate during the summer peak period. “From 15 Boeing 737-300/737-500s, we [now] have 11 in our operations. 9 we bought from leasing companies,” Gauss said. “We need these aircraft during the transition period.”
“(BAU) has never been [as] successful [as during] the 1st 6 months of 2017,” Gauss said. “The new CS300 is changing the image of airBaltic (BAU) every day. Now we are focusing [on] (BAU) [to] get an even more European touch“.
(BAU) will add 8 to 10 new routes next year. (BAU) has 20 CS300 jets on firm order.
August 2017: AirBaltic (BAU) took delivery of its 7th Bombardier CS300 of 20 on order.
October 2017: airBaltic (BAU) opened a new route from Riga (RIX) to Abu Dhabi (AUH) on October 29. There is no direct competition on the 4,368 km sector, which will be operated 4x-weekly by (BAU)’s new CS300 aircraft. Abu Dhabi will be airBaltic (BAU)’s only destination in the (UAE) during Winter 2017/2018.
December 2017: See video: "BAU-2017-12 Q400 Riga to Hamburg.jpg"
March 2018: "(ATW)'s Airline Market Leader: AirBaltic" by ATWOnline
March 26, 2018.
For Latvian carrier airBaltic (BAU), 2017 was a record year with ticket sales up +15% and passenger numbers up +21%. Under the leadership of (CEO) Martin Gauss, (BAU) has developed a unique brand and become the region’s fastest-growing airline with a market share that has grown to >30%. At its Riga base, the market share is >50%.
April 2018: "AirBaltic to Improve Route Map, Add More CS300s as Net Income Rises" by Kurt Hofmann ATW Plus, April 12, 2018.
Latvia’s national carrier airBaltic (BAU) reported a 2017 net income of +€4.6 million/$5.5 million, a nearly fourfold increase from €1.2 million in 2016. AirBaltic (BAU) (CEO) Martin Gauss said (BAU) is “ready to take the next step by developing and improving our route map and by adding more Bombardier CS300 jet aircraft to our fleet.” (BAU) pointed to an improvement in its (EBIT) figure, up to €20.2 million from €3.4 million in 2016.
May 2018: Latvian aviation stakeholders have signed a memorandum of cooperation, which will lead to the industry and government jointly creating an aviation strategy for 2019 to 2025.
The wide-ranging memorandum was signed by the Aviation Association of Latvia, which represents >40 aviation companies, and Latvian Transport Minister Uldis Augulis during the 2018 International Riga Aviation Forum (RAF 2018).
Together, the partners will look at future aviation development, spanning passenger, cargo and airport operations. “The memorandum intends to focus on both business aviation and aviation employment, education and research, aircraft construction, repair and maintenance, aeronautics and related services, as well as financial services and insurance of the aviation industry, aviation equipment manufacturing, supply and related industries, as well as remote aircraft services and their production,” Aviation Association of Latvia board member, Arturs Kokars said.
Under the initiative, a new cooperation platform will be established to discuss aviation development and challenges, specifically related to policy planning and improving the business environment. “Access to information is no longer an obstacle, but the ability to use this information is a major challenge. Therefore, the main beneficiaries of the creation of the Aviation Domain will be the airline operators in Latvia, whose views and proposals will be taken into account in the planning processes of the national aviation policy,” Kokars said.
Speaking for the government, Augulis said Riga Airport and Latvian carrier airBaltic (BAU) have strong development potential and a “targeted and structured cooperation” between the industry and the government could significantly contribute to the national economy.
“The aviation sector in Latvia is growing rapidly and becoming an increasingly important player in the national economy (its total investment already makes up 2.6% of the gross domestic product)” he said.
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BAU-CS300-1st - 2016-12.jpg
BAU-DHC-8-Q400NG - 2013-04
0 727-100 (JT8D), EX-(AAL), BIUSA LEASED (18440; 18900) PARTED OUT 1999-08
12 ORDERS 737-300/-400 TO REPLACE 737-500:
1 737-33A (CFM56-3B1) (2703-27454, /95 YL-BBI), (PEB) LEASED 2007-09. WITH WINGLETS. 149Y.
1 737-33V (CFM56-3B1) (3072-29332, /99 YL-BBK - - SEE PHOTO - - "BAU-737-33V-2008-05"), EX-(SKP), OAK HILL LEASED 2007-02. WITH WINGLETS. 149Y.
1 737-33V (CFM56-3) (3089-29334, /98 YL-BBL, 2007-01 - SEE PHOTO), EX-(SKP), OAK HILL LEASED 2007-01. WITH WINGLETS. 149Y.
3 737-36Q (CFM56-3C1) (3117-30333, /99 YL-BBJ; 3120-30334, /99 YL-BBX; 3129-30335, /99 YL-BBY), (GCP) LEASED 2008-04. 136Y.
0 737-505 (CFM56-3C1) (2018-24273, /91 YL-BBB), (BRT) LEASED 2003-11. RETURNED. 120Y.
0 737-505 (CFM56-3C1) (2138-24646, YL-BBA), EX-(BRT), (GEF) LEASED 2004-02. 120Y.
4 737-522 (CFM56-3C1) (2366-26680, /92 YL-BBM; 2368-26683, /92 YL-BBP; 2404-26688, /92 YL-BBQ; 2408-26691, /92 YL-BBQ), MARRON VENTURES LEASED 2007-04. 126Y.
0 737-53S (CFM56-3C1) (3083-29073, /98 YL-BBE; 3101-29075, /99 YL-BBD), EX-(AFA), (PEB) LEASED 2004-10. 120Y.
0 737-548 (CFM56-3B1) (1939-24878, /90 YL-BBF, 10/04; 1970-24919, /90 YL-BBG; 1975-24968, /91 YL-BBH), (ARL) LEASED. 24919; RETURNED & LEASED TO (DET) 2011-02. 120Y.
2 757-256ER (RB211-535E4) (897-26251, /99 YL-BDB; 905-26254, /99 YL-BDC), (ILF) 8 YEAR LEASED 2008-03 - SEE ATTACHED PHOTOS - - "BAU-757-2008-03" & "BAU-757 YL-BDC WITH WINGLETS," BOTH LEASED TO ROYAL FLIGHT. 200CY.
0 DC-9-10 (HUSHKITTED), (SAS) LEASED, RETURNED.
0 DC-9-15, (SAS) LEASED, RETURNED.
0 MD-83, (MD) AIRWAYS WET-LEASED 2010-08. RETURNED.
1 A319, (CSA) WET-LEASED.
0 AVRO RJ70 (LF507-1F) (E1223, /93 YL-BAK "KURZEME;" E1224, /93 YL-BAL "LATGALE;" E1225, /93 YL-BAN "VIDZEME"), B AE LEASED, 3 RETURNED 2005-08. 70Y.
1 ATR 72-200 (DAT) WET-LEASED 2015-09.
7 +13 ORDERS BOMBARDIER CS300, (55003, YL-CSA, 2016-11; 55004, YL-CSB, 2016-12; 55005, YL-CSC, 2017-03; 55006, YL-CSD, 2017; 55007, YL-CSE, 2017; 55008, YL-CSF, 2017; 55009, YL-CSG, 2017-07). 2 CLASS, 130 TO 150 PASSENGERS.
12 BOMBARDIER DASH 8-Q402 NEXTGEN (PW150A) (4289, YL-BAE, 2010-05; YL-BBT), EX-(C-FZGL), NORDIC AVIATION CAPITAL LEASED. 73Y.
8 F 50 (PW125B) (20149, /89 YL-BAR "CESIS;" 20162, /89 YL-BAS "ZEMGALE;" 20163, /89 YL-BAT "RIGA;" 20126, /88 YL-BAU; 20148, /89 YL-BAW; 20153, /89 YL-BAZ; 20189, YL-BAO), (SAS)/(GRB) LEASED. 6 GROUNDED 2012-01. ALL TO BE PHASED OUT BY END OF MARCH 2013. 46Y.
0 F 100 (BLF) WET-LEASED. 3 RETURNED.
0 SAAB 340, 1 RETURNED.
Click below for photos:
BAU-1-Martin Gauss - 2014-03.jpg
BAU-1-Martin Gauss - 2016-12.jpg
BAU-2-Reimonds Vejonis - 2016-12.jpg
BAU-CHMN CEO - MARTIN GAUSS - 2011-11
BAU-Janis Vanags-VP Corp Coms-2011-05-A
BAU-Janis Vanags-VP Corp Coms-201105
BAU-Ralf Dieter Montag-Grimes - 2015-11.jpg
MARTIN GAUSS, CHAIRMAN & (CEO), EX-(HGA) (2011-11).
Martin's contract has been extended until December 31, 2015.
2014-03: Interview by Max Oldorf, ch-aviation,
3 years ago Air Baltic (BAU) posted record losses and was suspected to be the next Flag Carrier to fail. Now in March 2014, Air Baltic (BAU) is 1 of the very few European success stories. Max Oldorf talked to Martin Gauss, former (CEO) at DBA (Deutsche BA) and Malev (HGA), now (CEO) at (BAU) about what it takes to re-animate a dying airline.
MO: Air Baltic has recently been through a very rough patch culminating in a major restructuring program. How did it perform in 2013?
MG: We are going to publish our  results at the end of March. While we had originally anticipated a multi-million euro loss, it appears our figures were far better than expected.
MO: 3 years ago Air Baltic (BAU) was in trouble and faced possible closure. What has changed since you joined the company?
MG: Well back then, I was asked if I would like to take over the management of an airline in dire straits and if so, what would I do to rescue it. So, I presented 4 different restructuring options to (BAU)’s shareholder (the government of Latvia represented by the Prime Minister and his cabinet) and told them which 1 of the 4 turnaround plans I personally preferred and what each would cost. All 4 proposals varied both in terms of overhead and depth of cost-cutting measures. In the end, we settled on a plan (my own preferred option in fact) which although not the cheapest to implement, was not the hardest to undertake in terms of restructuring either. Once we had settled on a way forward, we brought in Boston Consulting to help us iron out the finer details. In addition, I also brought in people I could trust. In my opinion, it was the plan which could deliver the results the airline needed over the ensuing 3 years, and it certainly paid off.
MO: Given the chance, would you do it the same way all over again? For example, you abolished your business (C) class at 1st, only to reintroduce it later?
MG: Like any restructuring plan, I had a checklist of sorts involving hundreds of tasks to be undertaken. However, it is only when you actually implement a policy that you sometimes discover that it would be best to maintain the status-quo. This was the case with our Business (C) Class. Whereas the previous administration’s plan had focused on growth, ours concentrated on improving yields and therefore profitability, which, I might add, we are learning to do rather successfully.
MO: The Latvian government has poured a lot of money into the company. Are you afraid that the European Commission (EC) may force Air Baltic (BAU) to pay back the subsidies as in the case of Hungary’s now defunct carrier, Malev (HGA)?
MG: Malev (HGA) was a completely different case. When I joined (BAU), the European Commission (EC) had already investigated the case and a year prior to the closure, it was more or less clear that we would be forced to pay back the subsidies. However, despite strong operating results and a positive Earnings Before Interest & Taxes (EBIT)), Malev (HGA) would never have been able to repay the funds. It was then that I decided to leave (HGA). In Air Baltic (BAU)’s case, it is still not clear as to whether or not government has provided “state-aid” in the strictest sense.
When (BAU) needed a cash-injection, both the private shareholder and government (as the 2nd shareholder) decided to increase its share capital. However, when it was discovered that the private shareholder was no longer able to provide the necessary funds, this resulted in 2 possible courses of action: either the capital drive be abandoned or government intervene on the private investor’s behalf. Given the gravity of the situation, the latter option was taken. It was then that the (EC) launched its investigation. Hopefully, the (EC) will agree with our position that government acted in a normal capacity as an ordinary investor but if not, the financial impact will be manageable. Quite honestly, I was confident about the outcome.
MO: How sustainable is the actual turnaround plan? Comparatively speaking, what are the primary differences between your current approach and the old one?
MG: Well, the old strategy focused primarily on boosting growth using very low fares to lure as many passengers as possible. The problem with that approach was that despite growth occurring, no one bothered to keep tab of the costs incurred to make said growth possible. This resulted in fares on some routes being either too low or too high.
In contrast, our current plan has focused on reducing capacity and altering our pricing structure. Over the last few years, we terminated several loss making routes and enforced a benchmark that all new routes have to turn a profit within a year of their 1st launch.
MO: How do you price your flights?
MG: We use a system developed by Lufthansa (DLH). Essentially, our fares are priced according to routing and point-to-point. For example, if we can offer a convenient flight connection with a stop in Riga, then this route is priced separately. Furthermore, ancillary revenue is very important for us and makes up for a significant percentage of our total passenger revenue.
MO: Your 2 Boeing 757s are not currently used on the Air Baltic (BAU) network. Will they return at some point in the near future?
MG: Currently they are on sub-lease to Royal Flight and have been painted in their livery. Though Royal Flight does not use them, they are airworthy. However, while we are currently making a loss on the 2 757s, the loss is less than if the 2 757s were in use on our network. The plan is for Royal Flight to lease the 2 jets from the lessor directly once our leasing contract expires.
MO: Are you prepared for possible delays with the Bombardier CSeries?
MG: As a stopgap, we have started to buy some of our current airplanes from their lessors (currently we own 5 Boeing 737-300s and 737-500s. So, should the C-Series experience delays, we will still be able to cover our operational needs using these 5 airplanes. In any case, we would ideally need 12 months notice over any possible delays. That would give us enough time to extend some lease contracts. However, I have to say that we have a very good relationship with Bombardier (BMB) and, just a few weeks ago, they confirmed that they expect delivery of our 1st CS300 to go ahead as planned in 2015 with a further 5 due in 2016.
MO: Are you planning to convert any of your C-Series options into orders?
MG: I am not authorized to comment on our options, but I can say that with our current fleet consisting of only 13 737-300/500s and with 10 CS300s on order, we do have plans to grow once we are profitable. We do not want to make any further cuts in the future.
Mo: You have recently introduced a free bus shuttle service from Riga to 6 cities in Estonia, Latvia, and Lithuania. Who is footing the bill?
MG: We are, and no municipality or government subsidizes it. We use it to boost our presence in these regions as it makes travel much easier for our passengers. Only Air Baltic (BAU) passengers can travel on these coach services and if the bus or the flight is delayed, we are responsible for finding an alternative flight connection or transport. We had a similar system at Malev (HGA) and it worked well there.
MO: Are you planning to expand your partnership with Etihad Airways (EHD)? Whose idea was it initially?
MG: It was our idea to approach (EHD) and we are happy that it has worked out. We operate these flights using our service concept and branding, while (EHD) just adds their flight code.
When we started flights from Riga to Abu Dhabi in December, we did so without much preparation resulting in a lower level of uptake than would normally have been expected. But despite this, we persevered it in order to exploit the winter market. You see, in the beginning, most passengers traveled point-to-point but the number of those traveling beyond has risen rapidly.
All things taken into consideration, we are happy with the outcome. And (EHD) is happy with the code share as well. One anomaly of the route is that for around 2 months during the summer, it doesn’t really make sense to fly direct [to Abu Dhabi]. In light of this, we are currently evaluating whether to route the flight via one of (EHD)’s European hubs (Amsterdam or Milan for instance) or to continue to fly direct during the period. As of this moment, we have wet-leased an Airbus A319 from (CSA) Czech Airlines for flights, due to a lack of suitable airplane in our own fleet. While the Boeing 737-300 could manage Riga to Abu Dhabi nonstop, the same cannot be said of the return leg given the strong headwinds. The arrival of the C-Series however should change all that.
MO: Previously, (BAU) offered international flights out of Vilnius. Are you planning to operate flights out of Tallinn or Vilnius again at all?
MG: Frankly speaking, both local carriers in Estonia and Lithuania face big challenges, but let us see where they go, as any decision taken on whether to begin these flights would hardly depend on the development of those 2 carriers. However, from our point of view, we still carry a lot of passengers from Lithuania and Estonia through our hub in Riga, so there is potential on some routes. Furthermore, while we will only commence flights if we are certain they will turn a profit, we also have to make sure that no new routes negatively impact the number of passengers transiting via our Riga hub.
MO: Ryanair (RYR) and Wizzair (WZZ) are considering serving more central airports from Riga in the future. How would that impact your business?
MG: Well, since nearly all our central routes are flown in competition to a low cost carrier (LCC), any move to serve more central airports on their part will likely lead to added price pressure. But given that price pressure in Latvia is already very high, I expect us to manage it. On other [less central] routes, we mostly operate on a high-frequency basis using turboprop airplanes. An example of this is our routes to Oslo or Stockholm. Unlike (LCC)s which can only offer a few weekly flights, we are able to offer multiple-daily frequencies, thereby forcing business (C) travelers to choose us. And even the higher per-seat costs associated with the Bombardier Dash 8-Q400 NextGen do not matter, because we rotate airplane types according to demand.
An example would be our Riga to Tallinn, and Riga to Munich services. If both flights are well booked, we deploy a Boeing 737 to both destinations. If only the Munich flight is satisfactorily booked, then we only send a Boeing to Munich. If neither flight is adequately filled, and we only have 1 Boeing 737 and 1 Dash 8-Q400 available, then the smaller airplane is deployed on the longer route. Our fleet makeup allows us a lot of flexibility in terms of equipment choice and because of that, our overall costs are kept low.
MO: Wizzair (WZZ) and Ryanair (RYR) are both very active in Eastern Europe. Which carrier is more dangerous in your eyes?
MG: Both carriers present challenges, but they do have their differences. For example, while (RYR) is a lot cheaper than (WZZ), it will abandon an unprofitable route a lot sooner than (WZZ) will. But we shouldn’t focus too much on competing against them. Our real challenge will come from Russian airlines whose use of large 737s on Moscow – Riga flights will give them a much lower cost base. Moscow is a very important market for us, but unfortunately the competition is now becoming more and more active.
MO: In the long run, can Air Baltic (BAU) continue to exist without a big partner airline?
MG: Even with its current size, (BAU) has been able to operate independently for a couple of years now. When I started, the 1st target (BAU)’s owners set me, was to stop bleeding money. We have now reached that goal smartly using the resources available. But, what we would need is an external partner to finance our CSeries order. Given that the contracts have excellent conditions, there might be interested parties. In any case, our current owner is unlikely to finance the airplane, so we will need a sale-and-lease-back plan or an external investor at some point. So to answer your question, Air Baltic (BAU) could, at some point, need a strong partner, but before that can happen, the government has to decide what their future plans for (BAU) are and whether or not they want to sell it.
MO: Mr Gauss, we’re told you’ve been given the nickname “Firefighter” as a result of all your previous experience with restructuring loss-making carriers. Is this true?
MG: (Laughs) I’m afraid so. But I haven’t adopted it…
MO: Do you ever have the desire to go and work for a robust and sustainable airline?
MG: No not really. My private life is perfectly suited to the role of a “firefighter.” You see, my family and most of my friends live in Munich, and I have a well organized social life there, that can be handled with limited effort. That’s why I commute a lot between the 2 cities (Riga and Munich).
I cannot imagine permanently moving with my family to another city let alone a country. Actually at the moment, because the turnaround at Air Baltic (BAU) has worked out, I find myself thinking about what’s next to come up. I am not the type to sit around and grow old in a specific company and I have no problems with leaving a company, once my work there is finished. I was at Deutsche BA (DBA) for 12 years until things turned around. After it was sold, I moved on with no regrets.
MO: Despite your hand in the business’s turnaround, 1 often only hears the name “Hans Rudolf Woehrl” mentioned in relation to the successful restructuring and sale of (DBA) to Air Berlin (BER). How do you feel about that?
MG: I am absolutely fine with that. Woehrl took a risk in buying the company under his name. He then took an even bigger risk in appointing Peter Wojahn and me as directors. Lastly, his biggest risk was selling the company (us included) to Air Berlin (BER). All in all, it’s the owner who takes the risks and makes the decisions, and therefore it is he who deserves the credit. In that case, it was Hans Rudolf Woehrl and I personally have no problem getting less recognition than he for my own work. Normally if you do a good job the recognition comes from that, and in all honesty, I actually prefer not being in the spotlight, as it then means I can still enjoy my private life.
MO: So that pretty much means becoming the new (CEO) of Lufthansa (DLH) wouldn’t be that appealing to you?
MG: I always answer this question with the old saying: – “Stick to what you know best.” In fact, it is a completely different task altogether. To master such a job, you would have to be as qualified as Carsten Spohr is. He has been at Lufthansa (DLH) and its subsidiaries for many years and knows its structure very well. He is also at the perfect age for it and has a network that he can rely on. So from my point, he is the perfect man for this job and to bring in another airline manager to replace him, should only be done so as a Plan B. While I don’t know Carsten Spohr very well, when I look at what he brings to the table, and considering the rough patch (DLH) is going through, he is the perfect choice, and I wish him the best of luck and success.
MO: So you cannot imagine yourself running a big multinational company?
MG: I don’t think anyone sees me as the boss of a multinational company. They more likely see me as the guy that gets the job done. But never say never. Up until today, whenever I have left an old job, I have had no clue what is next to come.
MO: How do you live with that uncertainty and do you sometimes wish you could be in a completely different industry sector?
MG: Actually I cope with it very well. I have never been afraid of not finding another job. In fact, it was always the opposite and even though I am 45, I still have a few years of work left in me.
Regarding your 2nd question, I would be very glad if one day I could compare how my knowledge of turning around airlines, when applied to other industries, performs against that of those industry’s professionals. For example, within the automotive industry, would an airline manager achieve the same or better results there, because the airline industry is so competitive, or would he fail because in actual fact, the automotive industry is the tougher market to survive in? That’s a question that would really interest me, but up until now no one, unfortunately, has come to me and asked if I would like to take on an automotive company. (laughs).
MO: Where do you see yourself in 5 years?
MG: I haven’t really thought about that just yet. In my private life, certainly, but when it comes to work, I would simply like to have an interesting job. Thanks to the (DBA) deal, I am very fortunate in that I can operate independently and thus focus on my own success. That’s probably why I am only attracted to jobs where I see the possibility of my success shining through and if I could see myself being successful [in that role]. That will always be the key driver in my choice of what I do next. I probably see myself as being more successful than the shareholder in that current situation does. That’s how it was at Woehrl/(DBA), at Malev (HGA), and at Air Baltic (BAU); they thought it would be impossible to change the status quo given the political and economic situation. But I have to admit that it has been a completely different experience at (BAU) compared to (DBA). Back then, for example, there wasn’t any social media at all, so it was a completely different ball game.
MO: Our final question is one we got on Facebook: Do you have any plans to resume the Dublin route?
MG: Well, as long as Ryanair (RYR) serves the route, it makes no sense for us to relaunch our Dublin services. However, we have just opened Riga to Aberdeen, which keeps our airplanes busy. So while Dublin is a leisure and workers route only, Aberdeen is an oil route that connects with Baku (in Azerbaijan). Aberdeen only makes sense because we serve Baku as well.
MARTIN SEDLACKY, CHIEF OPERATIONS OFFICER (COO) (2012-05).
MARTINS ANTONOVICS, CHIEF FINANCIAL OFFICER (CFO) AND VP FINANCE & CONTROL.
CHRISTOPHE VIATTE, CHIEF COMMERCIAL OFFICER (CCO).
PAULS CALITIS, SENIOR VP FLIGHT OPERATIONS.
ALGIRTS MIKELSONS, SENIOR VP TECHNICAL OPERATIONS.
AUSTRIS ZOBENS, SENIOR VP QUALITY ASSURANCE (QA).
WOLFGANG REUSS, SENIOR VP NETWORK MANAGEMENT.
GUNTHER SOLLINGER, SENIOR VP COMMERCIAL AFFAIRS.
INTA SUSTA, SENIOR VP FINANCE & CONTROL.
GREGORY POMERANTSEV, SENIOR VP GROUND OPERATIONS.
JANIS VANAGS, VP CORPORATE COMMUNICATIONS.
ERNIE TIEDT, TECHNICAL DIRECTOR (T: 371-2) 225-021).
PETER FRITH, TECHNICAL DIRECTOR (727).
ROLANDS RAMINS, QUALITY DIRECTOR.
JANIS VANAGS, VP CORPORATE COMMUNICATIONS.
RUTA SKUJENIECE, VP SALES.
SVENS DINSDORFS, VP STRATEGIC DEVELOPMENT.
LAILA ODINA, HUMAN RESOURCES (HR) & ADMINISTRATION DIRECTOR.
ALEX CAIRNCROSS, QUALITY ASSURANCE (QA) TECHNICIAN.