Estonia Pledges Political Support for airBaltic
Estonian Prime Minister Kristen Michal has confirmed his country will lend political support to airBaltic without committing any financial investment, despite calls from Latvia’s leadership for regional backing. After Latvian Prime Minister Evika Siliņa urged Estonia and Lithuania to aid airBaltic, Michal told TV3 that “political support does not always mean investing money; it also means positive sympathy.” He praised airBaltic for maintaining high-quality service and essential air connectivity to Estonia, but made clear Tallinn has no plans to buy a stake in the Latvian carrier.
airBaltic, which remains 97.97 percent state-owned by Latvia, is seeking stability ahead of a long-awaited initial public offering. Its Transport Minister Atis Švinka said on Radio 1’s “Krustpunktā” programme on April 10 that while the airline continues IPO preparations, unfavourable market conditions have forced a delay. Švinka added that the government is exploring various scenarios—beyond direct capital contributions—that could allow Estonia and Lithuania to demonstrate their support, such as regulatory collaboration or guarantees.
The carrier posted a net loss of EUR 118.2 million (USD 130 million) for 2024, prompting a leadership shake-up when veteran CEO Martin Gauss was dismissed at an April 7 supervisory board meeting. Earlier this year, airBaltic secured a EUR 14 million (USD 15.5 million) strategic investment from the Lufthansa Group, underscoring its need for fresh capital and industry partnerships. Despite these measures, Latvia remains airBaltic’s dominant shareholder, and its efforts to broaden support across the Baltic region have met with mixed responses.
Estonia’s decision to refrain from direct funding reflects prudent fiscal management and broader economic constraints. Tallinn has prioritised post‑pandemic recovery and balanced budgets, making substantial state investments in foreign carriers politically challenging. Instead, Estonia is offering diplomatic and regulatory backing, pledging to facilitate airBaltic’s market access, support bilateral aviation agreements, and endorse its route expansion plans. Such non‑financial measures could smooth the airline’s path to profitability and bolster investor confidence ahead of its IPO.
airBaltic operates a modern fleet of 50 Airbus A220‑300s, with another 40 on order, making it one of the world’s largest A220 operators. To generate additional revenue and maintain high utilisation, the airline is wet‑leasing its A220 aircraft to partner carriers including Swiss (3 jets), Lufthansa (6 jets), Brussels Airlines (5 jets), and Austrian Airlines (3 jets). These leasing deals not only strengthen airBaltic’s financial position but also enhance its reputation for operational flexibility within the European market.
Lithuania has yet to declare its position publicly, leaving airBaltic’s Latvian owners to weigh the benefits of partial or symbolic regional investment. Analysts note that political endorsements and regulatory support from neighbouring states can positively influence credit ratings and market valuations, even in the absence of capital injections. If Lithuania joins Estonia in offering such non‑equity support, airBaltic could gain a stronger platform from which to secure its IPO and pursue sustainable growth.
As airBaltic navigates the next phase of its recovery, it faces the dual challenge of restoring profitability and preparing for public listing amid volatile market conditions. While Estonia will not provide direct funding, its commitment to “positive sympathy” signals a willingness to collaborate on policy and infrastructure initiatives that benefit the Baltic aviation sector as a whole. With strategic government support, modern fleet capabilities, and ongoing partnerships with leading European airlines, airBaltic aims to stabilise its finances and chart a course toward long‑term success.
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Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com