AirBaltic does not plan to ask for financial assistance from the state again

Instead of the planned six million passengers planned for the Latvian national airline airBaltic, two million will meet this year at best, because due to the requirement of self-isolation, a large part of its flights are half empty, but the airline does not intend to ask for help again, TV3 Ziņas reports.

Before the launch of Covid-19, airBaltic planned to carry at least six million passengers from all three Baltic capitals to European destinations this year. Now it looks – well, if two million meet. In the spring, when regular services were completely suspended from March 17 and 40% of employees were laid off, the only ones were repatriation flights. With flights resuming on May 18, the largest number of passengers was reached in July. However, as more and more countries reached the Latvian yellow and red lists due to Covid morbidity, airBaltic experienced a dramatic drop in ticket sales.

“Passengers currently fly only if they can afford to spend 10 days in self-isolation after returning to Latvia. “You can’t spend 10 days in self-isolation at home, at work, in everyday life or as an entrepreneur,” says Martin Gauss, CEO of airBaltic. Read more here: The period of self-isolation is reduced to ten days for immigrants from abroad

During the Covid-19 pandemic, airBaltic’s turnover in the first half of the year decreased by 78 million euros. Meanwhile, losses have risen sharply – sevenfold – to 186 million euros. Get acquainted with the financial results here!

“It simply came to our notice then. These losses continue to grow in proportion to the number of countries from which self-isolation must be observed when entering Latvia, ”explains Gauss.

Now there are only two countries left – Finland and Cyprus – of which, upon arrival in Latvia, there is no mandatory 10-day self-isolation. As the list changes every Friday, people can’t be sure of their destination status next week, so they don’t buy tickets. Although the head of airBaltic says that the airline is in crisis, the financial situation is stable due to Latvia’s 250 million euros invested by the government.

“We have not spent that money. People are mistaken in thinking that you have received EUR 250 million from the country, but you already have a loss of EUR 186 million. No it’s not. We have already started the road through this crisis with a lot of our own money. AirBaltic was very successful before the crisis. Last year, bonds worth 200 million euros were successfully issued, ”Gauss reminded. Therefore, the head of airBaltic rejects the concern that he will soon have to ask for help from the state again.

“You will not hear from me in December – oh, we ran out of money. It will certainly not be, because we have even included a scenario in our new business plan if all flights have to be stopped completely again. Our finances are prepared for this. I can definitely guarantee that this December I will not turn to the Latvian government with a request – we need money again. I can guarantee you that. “Our financial situation is still very good compared to our competitors, but that does not mean that we have to waste money uselessly,” he said.

And this burning is half empty. Most airBaltic planes currently fly with only a few passengers to 37 destinations from Riga. Only the two most popular routes are the most frequently sold – Tbilisi and Munich. The head of airBaltic does not want to interfere in the work of epidemiologists, but calls on the Latvian government to heed the European Commission’s call for all Member States to introduce uniform entry requirements.

“If the requirement for self-isolation were replaced by mandatory testing upon arrival in Latvia, as is already the case in several countries, we would see a strong increase in the number of passengers. That should be immediate. We feel that people have a great desire to travel, ”he said. The second option is to increase the cumulative morbidity rates from 16 to 25 cases per 100,000 people. This would revive airbaltic’s strongest market, Germany. Currently, only a few of them come to Latvia.

“The current restrictions have nothing to do with Covid-19. Where is the logic if a healthy person has to observe self-isolation after a flight, but no one controls the flow of private cars across land borders. At the moment, the aviation industry has become a victim, ”Gauss believes.

He also draws attention to the fact that it is absurd to find yourself in a situation where only two countries can currently enter Latvia without the requirement of self-isolation. “It is as absurd as we have to send our crew in self-isolation if they have stayed abroad in a hotel after the flight. As we continue, we will no longer have a functioning crew and there will be no flying, because we have to observe self-isolation, ”said Gauss.

Commenting on whether it is not better to temporarily close almost empty routes due to money savings, the head of airBaltic says that these losses should be perceived as a fee for maintaining a market position. “If we stop flying completely again now, you would see that competitors are breaking into Latvia and would take only the most money-bearing routes, abandoning the others. Then connections from the Baltics to other countries would be abandoned 30 years ago. We don’t want that at all, “said Gauss.

While flights from Riga are declining, airBaltic is actively expanding its operations from Vilnius to new destinations. In Lithuania, the restrictions after arrival are less strict.

Gauss says that airBaltic is a great success in Vilnius – the number of passengers is currently growing by as much as 20%. Right now we are in Lithuania, our operation is as successful as ever in the history of airBaltic. The reason is that there are no stifling restrictions for passengers, ”he says.

In international rankings, airBaltic is currently considered one of the few airlines that is expected to develop rapidly after the crisis due to its sustainable model and state-of-the-art fleet.

If the European Commission and the European Parliament call for uniform restrictions on the spread of Covid-19 in all EU Member States, such as allowing a person to go into self-isolation only if the number of Covid-19 cases in the country of entry exceeds 50 per 100,000 inhabitants, airBaltic Would be an opportunity to reduce the losses of millions.

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