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Pabriks: losing control over airBaltic would be a mistake for Latvia

Artis Pabriks/flickr.com.
«If attraction of an investor for Latvian’s national airline airBaltic results in full privatization of the company, Latvian state would make a strategic mistake,» says MEP Artis Pabriks.

He notes that attraction of a strategic investor should not deviate from the original goal to preserve 51% of airBaltic shares for the state. «Attraction of an investor is a matter of security, especially in such an industry as aviation. There are many different criteria that have to be followed by foreign and local investors, and unfortunately there aren’t many examples of good practice in which Latvian strategic objects were entrusted in the hands of investors. Experiences vary. This is why I am sceptical about the intention to fully privatize airBaltic,» adds Pabriks.

«It is important to keep in mind that a number of unpopular decisions have been made behind everyone’s backs to save the company over the course of the years. The state has invested millions into the airline. Finally, airBaltic’s stability has been improved, as has its economic and strategic importance. I believe Latvia cannot afford to lose influence over the national airline at this moment,» said Pabriks.

He emphasizes that it would be a short-sighted and unfair decision before Latvian residents, who have been told for years why it was important to invest their paid taxes to save the airline instead of diverting the money towards education, healthcare and defence.

The politician also notes: «It should also be noted that airBaltic business development course, thanks to which the company has managed to improve its own and Latvia’s reputation. Attraction of any new investor would cause Latvia to lose its influence over the country. In a short period of time Latvia’s story of success could become history if the new investor does not continue direct flights but rather focusing on other European airlines.»

Latvian Transport Ministry is currently engaged in reviewing specific offers for attraction of investors for airBaltic. A full privatization of the company is not out of the question, says the ministry’s state secretary Kaspars Ozoliņš.

He says attraction of an investor is the main challenge at the moment. «We have been very productive lately. The ministry has enlisted help from Lazard Freres to evaluate potential strategic partners for airBaltic. There is one major nuance, however. As the largest shareholder, the state has to ensure the company’s development. And for the company to develop there have to be shareholders who would invest in it.»

Ozoliņš also emphasized that it is important to keep in mind EU regulation that states how state investments are considered state support. «This is why state support would not be beneficial for the company’s development. Basically it is hard for the state to serve as shareholder, because laws do not permit investment opportunities available to a private investor,» Ozoliņš explains.


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