Latvian national carrier airBaltic, which is 53% owned by the Latvian government and 47% owned by Baltic Aviation Systems, an offshore investment vehicle of President and CEO Bertolt Flick, made a loss of LVL13 million (€18.3 million) in the first five months of 2011.
The heaviest losses were posted in the first quarter, when the carrier recorded an LVL18 million loss, although this was offset by a LVL5 million profit in the following two months.
Passenger traffic growth at airBaltic fell for five consecutive months from Nov-2010, before the airline returned to growth after April 2011.
airBaltic is facing stiff competition from the likes of Ryanair and Wizz Air, which has led to it downsizing its services from Vilnus due too much competition in March.
Finance Minister Artis Kampars stated in June 10 that the company was close to insolvency, with the government growing concerned that its funding was being "leaked" to unspecified offshore companies. The finance ministry has called for airBaltic shareholders to appoint a new council. The Cabinet and the Transport Ministry is currently working on a development plan for the carrier.
The Latvian government has stated it plans to find new investors in airBaltic as part of plans to redevelop the airline’s strategy and put it on more secure financial footing.
