Commission approves €250 million Latvian measure to recapitalise airBalticChristian Fernsby ▼ | July 6, 2020
The European Commission has approved a €250 million Latvian measure to recapitalise airBaltic in the context of the coronavirus outbreak.
Topics: Latvia airBaltic
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “AirBaltic plays a key role for the Latvian economy. It contributes to foreign trade and to ensuring Latvia's domestic and international connectivity. The crisis has hit this airline, as many other companies in the aviation sector, particularly hard.
"The €250 million Latvian racapitalisation measure will help airBaltic weather the crisis. At the same time, the measure ensures that the State is sufficiently remunerated for the risk taxpayers assume, and that the support comes with strings attached, including a dividend ban as well as further measures to limit distortions of competition.
"We continue working in close contact and cooperation with Member States, to find workable solutions to mitigate the economic impact of the coronavirus outbreak, in line with EU rules.”
Latvia notified to the Commission under the Temporary Framework a €250 million recapitalisation of airBaltic.
With its main hub at Riga airport, airBaltic is the largest airline in Latvia. Its main shareholder is the Latvian State, which currently holds a participation of around 80%. After the recapitalisation, which will be carried in July 2020, the participation of the State will increase to above 96%.
In the second quarter of 2020, airBaltic has suffered substantial losses due to the coronavirus outbreak and the travel restrictions that Latvia and other countries had to impose to limit the spread of the coronavirus. As a result, airBailtic is currently facing an acute risk of default and insolvency. ■