AirBaltic receives financing boost to expand in the Baltics
The Latvian parliament approved the inclusion of a private investor to Latvian airline AirBaltic. The company will use money from the investor to increase its fleet and the number of direct flights from all Baltic capital cities in the next five years.
German company Ralf-Dieter Montag Grimes, the private-sector investor, will pump 52 million euros into the company, while the Latvian government, which currently owns 99.8 percent of AirBaltic, will add 80 million.
Montag Grimes will purchase 20 percent of the company although Latvia will continue to look for a strategic partner.
Latvian Transport Minister Anrijs Matīss said the move was necessary as Latvia cannot invest into the company without an outside investor, according to EU regulations.
The decision to add a private-sector investor means that the company will increase direct flights from both Estonia and Latvia. The number of flights between the three countries will also increase.
The company announced in June that it will open 11 direct routes from Tallinn by 2021. Currently AirBaltic flies directly to Paris, Vienna, Berlin and Riga, from Tallinn. Oslo, Stockholm, Varna, Brussels, Amsterdam and Copenhagen will be added to that list.
In mid-2014, the European Commission ruled that Latvian state-aid to restructure AirBaltic was in line with EU regulations.
Estonian Air, the Estonian-state-owned carrier, is still waiting for its decision on financing it received from the Estonian state.