“The decision of the European Commission creates legal certainty about the past; we at airBaltic can now concentrate on serving our customers and focus on our future development” says airBaltic’s CEO Martin Gauss.
RIGA – The European Commission announced its decision to approve past financial transactions involving airBaltic shareholders who financed the airline’s restructuring efforts. After an in-depth investigation, the Commission concluded that some of the measures were not state aid, and potential distortive effects of other measures had been offset by airBaltic’s EU-conform Restructuring Plan.
Martin Gauss, Chief Executive Officer of airBaltic “The Commission’s investigations into the financial transactions between the company and its shareholders were legally important, of course. We provided all the necessary documents and information, and we developed a Restructuring Plan, which ensured a return to viability in full adherence to the requirements of the European Union’s legislation in preventing any form of distortion in the market. The central focus of our restructuring initiatives is our customer. We have focused our efforts on routes where the demand is high; we have tight cost controls in place to offer affordable flying to our customers; we have improved the efficiency of our fleet and will do so even further, as we introduce new modern aircraft. We welcome the approval of the Restructuring Plan by the European Commission because it offers legal certainty for our industry partners and investors, and it enables us to focus on delivering sustainable connectivity for this region of Europe.”
In early 2012 a past shareholder in airBaltic, filed a complaint to the European Commission related to actions taken by the shareholders of airBaltic that subsequently led to a restructuring of the airline. The European Commission opened an in-depth inquiry into these actions on 20 November 2012. In its decision of today, the Commission ruled that not all transactions were state aid; however, to the extent that they did constitute elements of state aid, airBaltic had developed and implemented a far-reaching restructuring plan, which offset the distortive effects of such transactions by discontinuing profitable routes, surrendering slots in busy coordinated airports, reducing the fleet from 34 to 25 aircraft, reducing the amount of capacity and providing own contribution of almost 49% towards the cost of restructuring. These measures ensure that airBaltic will remain a competitive airline.
As announced earlier, airBaltic achieved a net profit of EUR +1 million for the entire year of 2013. airBaltic has surpassed by far its original plans and has turned around the FY2012 loss of EUR -27 million, converting it into a net profit of EUR +1 million for 2013. airBaltic has achieved profitability one year ahead of its initial schedule despite – and due to – the fierce competition in Europe and internationally.
Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales.
She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.
