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samedi 15 février 2025

Le journal des étudiantes et étudiants de Lyon 3

AirBaltic : A Baltic company in full expansion

Special thanks to Mr Gauss, airBaltic’s CEO, for answering our questions, and to Ms Bethere, SVP Corporate Communications, for coordinating the interview. 

Europe is home to many airlines, with well-known names such as Air France-KLM and Lufthansa coming to mind. However, there are also numerous smaller carriers, and one of the most promising is based in Latvia. Founded in 1995, AirBaltic is Latvia’s national airline. As the company’s Initial Public Offering is just around the corner, I invite you to learn m ore about it in this article, complemented by an interview with Mr. Gauss, the current CEO.

  1. History of the airline

In post-soviet Latvia, airBaltic was founded in 1995, and is the result of a joint venture between the Latvian state, SAS and Danish and Swedish funds. It was established on the remnants of Latavia, the Latvian branch of Aeroflot. Latavio was not successful after the end of the soviet-era and the company was shut down in 1995.

The first flight took place in October 1995 with a SAAB 340, and AirBaltic opened its cargo airline in 1997. Despite being a dark year for aviation, 2001 was the first profitable year for airBaltic. The 2000s were the beginning of a new-era for Latvia, having joined the European Union in 2004. AirBaltic was rebranded in 2004 and adopted its signature green-lime color and opened a hub in Vilnius. The global financial crisis of 2007-2008 was an opportunity for airBaltic management, behind BAS company, to purchase SAS shares in the company.

However, the company experienced difficulties between 2010 and 2013 because of speculation and economic issues. The collapse of the bank behind BAS enabled the government to acquire almost all of the company’s shares. This restructuring led to change in the governance with a new CEO, Mr Gauss. In the 2010’s, a lot of Baltic airlines went bankrupt such as Estonian Air or Air Lituanica.

The Covid-period was a difficult time for every airline and airBaltic was not an exception. The company transported respirators and masks from China to Latvia and repatriated many Baltic citizens. Despite this hard time, AirBaltic continues to grow.

  1. A company with a promising future

AirBaltic is on an upward trajectory. In 2023, the airline carried 4,5 million passengers and 5 million in 2024. The company operated 70 000 flights in 2024 with  a revenue of 750 million euros, 82 million more than in 2023. The company currently has 4 permanent bases in Riga (Latvia), Tallinn (Estonia), Vilnius (Lithuania) and Tampere (Finland) and one seasonal in Las Palmas (Gran Canaria, Spain).

AirBaltic operates 130 routes for 70 destinations and shares 300 destinations with partners like Lufthansa, LOT, Turkish Airline, Emirates, Air Canada, Air France and many others. The 70 destinations served by AirBaltic are located in Europe, Caucasus, Middle East and North Africa.

The company follows a Baltic tradition of modernity. After the soviet occupation, the Baltic states embraced innovation and technological experimentation. For example, Skype was founded in Estonia. AirBaltic is the first world airline to issue NFT in 2021. Aiming to develop in the Web 3, airBaltic took part in Paris Blockchain 2023 and in NFT NYC 2023. To commemorate Latvian Independence Day, the company issued a special NFT. To offer high-speed internet to passengers, airBaltic is equipping its fleet with SpaceX’s Starlink.

The model of airBaltic is original. As described on the website, airbaltic is “a hybrid airline, it leverages the upsides of both traditional network and low-cost carriers”. The company is part of a drive to make the Baltic States major players in the European economy. Also, airBaltic is a single-type fleet utilising 49 Airbus A220-300. They aim to have 100 Airbus A220-300 by 2030.

In August 2024, the Latvian Government agreed to an IPO for airBaltic on condition they keep at least 25% of shares. Current challenges with engine deliveries have delayed the potential IPO, now projected for early 2026..

  1. Interview with Mr Gauss, airBaltic’s CEO

What key lessons have you learned as the CEO of airBaltic during your tenure?

Leading airBaltic over the years has been an extraordinary journey filled with valuable lessons. I have learned that discipline is a key driver of success— it ensures consistency and excellence. Agile decision-making is equally critical, enabling us to respond effectively to challenges and opportunities. Simplicity in processes and a focus on making requirements less complex but more effective has proven essential for efficiency. Most importantly, courage to take big decisions — having a vision and staying focused on it — has been pivotal. Bold, well-informed choices are what shape the future of an organization.

How do you envision the future of airBaltic?

The future of airBaltic is defined by innovation, growth, and leadership in aviation. As one of the fastest-growing airlines in Europe, airBaltic is committed to expanding its fleet and strengthening its network to enhance connectivity within Europe and beyond. This growth not only improves accessibility for our passengers but also drives economic development in the Baltic region.

Innovation is at the core of our vision. We are embracing cutting-edge technologies, including AI-driven tools, to optimize our operations and customer experience. A prime example is our adoption of Starlink’s high-speed internet service on board, offering passengers unparalleled connectivity during their journey. This reinforces airBaltic’s commitment to staying at the forefront of technological advancements in aviation.

In addition, the potential IPO represents a significant milestone in airBaltic’s journey. I have a clear and ambitious vision for the airline’s future, and the IPO is an integral part of our strategy to enable further growth, attract new investment, and strengthen our position as a leading carrier in the region.

Conclusion :

Despite the many challenges it has faced, AirBaltic has remarkable growth prospects. With a strategy focused on innovation, a modern fleet made up entirely of Airbus A220-300s, and ongoing network expansion, the company seems well positioned to become a key player in European aviation. Its ability to adapt and invest in cutting-edge technologies, such as the integration of high-speed internet with Starlink, testifies to its ambitious vision. AirBaltic is undoubtedly a company to watch in the European aviation landscape.

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