Air Baltic flies from Tallinn Airport to northern European destinations including Copenhagen and Vilnius, but is based in Riga whence it flies to a much broader range of destinations, including Abu Dhabi, Rome and Madrid, usually on a seasonal basis.

The company issued €200 million-worth of bonds in the summer, which were snapped up by over 100 international investors, the company says. The bond issue was the largest in Latvia's history, according to ERR's online news in Estonian, with bonds being valid for five years at a 6.75 percent interest rate.

Nevertheless, the company has been coy about publicizing its full financial picture, according to ERR in Estonian, with annual reports on the company's website notably brief (seven pages long in the most recent case, for a company with a turnover of hundreds of millions of euros, compared with a 45-page report by Estonia's Nordica, which has a turnover of around €100 million).

It does at least have reports available, however – Polish state-owed operator LOT (and co-owner of Nordica subsidiary Regional Jet) does not have any on its website.

Air Baltic had previously announced its revenue grew by 22 percent in 2017 and tripled profits to €4.6 million in the same period; however this information has been removed.

Data provided to potential investors, however, far from quoting a profit, reported a loss of €18.7 million.

The company said that the losses were mostly the result of tax obligations deferred from earlier periods.

The same decline in the once-rosy outlook applied this year. Whereas in 2018 Air Baltic said in May this had grown by 18 percent to €409 million, by the time it started issuing the bonds a few months later, this had been revised downwards by a couple of million, with projected profits down to €3 million (from €5.4 million projected in May).

Also noteworthy is the moving around of money in the accounting process, from the company's legal disputes reserve fund. €20 million of this was moved into profits, leaving €6.8 million for legal fees. The company said early this year it had won several lawsuit cases, without divulging what these were.

Thus without the moving of the legal funds into the profit category, losses would have been around €17 million in 2018 (i.e. €3 million minus the c. €20 million legal fund).

Latvian media coverage of Air Baltic

In summer, Latvian daily, quite literally, Diena, said that Air Baltic had made losses of €30 million in Q1 2019. The company said that it did not publish quarterly reports, but neither confirmed or denied the allegations, instead quietly publishing its half-year report some time in August or September.

The latter quoted the figure of €26.6 million losses noted above, from €15.5 million in the previous year, even though revenue had risen from €182.7 million to €219.5 million y-o-y over the same period.

This need not equate to a loss of over €50 million for the year, due to the seasonal nature of the airline industry making summer the most profitable time. Since the first-half report for 2019 naturally only ran to the end of June, a large chunk of summer figures are still to be reported.

Air Baltic CEO Martin Gauss also told ERR Thursday that changes in accounting standards, from Latvian ones to international standards, had been a factor in the changing figures from 2017 and 2018.

Gauss would not comment on loss predictions for 2019 as a whole, but said the company aimed for turnover in the region of half a billion euros for the year.

Regional Jet CEO's comment

The losses reported so far compare with Estonian state-owned carrier Nordica, which has also made losses, but of €5.4 million for 2018, and Subsidiary Regional Jet projects profits of €3.5 million for 2019.

Nordica has however has cut most of its international connections from Tallinn Airport, though it is also involved in operating domestic routes in Sweden, together with subsidiary Regional Je

Regional Jet CEO Jan Palmér, a champion of the outsourcing business model which involves his company "wet-leasing" planes and flight crews (the latter often picked up from recruitment agencies) to client airlines like SAS, told journalists Wednesday that Air Baltic should have long since ceased operations, despite its importance for Latvian prestige and not withstanding state support. Palmér oversaw the liquidation of Estonian state carrier Estonian Air in late 2015, which had been found guilty of infringing EU regulations in its state support, prior to Palmér's tenure, and which it was unable to pay back.

"The Latvian state has poured huge amounts of money into [Air Baltic]," said Palmér, who believes smaller, independent ticket-selling airlines will soon be a thing of the past.

"They have a different logic. They want flight connections to attract investor," he added, noting that it was in Air Baltic's interest that both Nordica and former Lithuanian carrier FlyLAL exit the market (which the latter did 10 years ago).

One possible reason for the continued support of the loss-maker by the Latvian government is to retain Riga's position as the major hub and investment target in the three Baltic states, which necessitates regular and direct links.

If the information on its own website is accurate, Air Baltic runs just under 40 aircraft, of four different models.

It also said it aims to order 30 more Airbus A220-300 aircraft in a €4.8 billion-deal which would give it an option for a further 30 airbuses, with a view to switching solely to that model of plane in future.

Air Baltic serves a total of 70 destinations, 12 direct from Tallinn Airport and half that number from Vilnius. The Latvian state owns an 80 percent stake, with the remainder held by Aircraft Leasing 1 SIA, owned by Danish businessman Lars Thuesen.