The director of Latvia Air Baltic is happy to have a larger share of the Lithuanian market: all crises will end one day

The interlocutor was also satisfied that, following the resumption of flights, the market share of Latvians in Latvia increased. “We immediately had 20 percent. Market, when before we had 9%,” he revealed.

Gauss is optimistic about the future of the airline industry and believes that in a few years passenger flows will be even higher than in 2019.

The Director of Air Baltic will participate in the login conference on September 24-25.

– In March, due to the coronavirus pandemic, Air Baltic suspended all flights. How was the road to this decision?

– In January, Air Baltic’s management analyzed a lot of information about the transfer of pathogens from China. Our long haul flights from Europe to China were no longer the first to fly and we made the decision to cancel all flights when we saw a sharp drop in bookings.

Having formed a crisis team, we realized that our financial results could be in jeopardy. We would have lost a lot in crisis mode because flying had already become illogical. On some flights, the proportion of passengers who did not show up reached even more than 60%.

However, we suspended all flights not only for revenue but also for security reasons, as the Latvian Cabinet of Ministers decided to suspend all international flights.

– You have described the pandemic as the greatest crisis in the history of aviation. Will Air Baltic survive?

– When we stopped all flights, we immediately presented an action plan for what we will do next. At the time, no one yet knew how the pandemic would unfold. But we knew that every crisis ends.

In the first week, we sent all employees home and only eleven Air Baltic executives were left in the office. We have developed a survival plan, how to change our services for the future. Together, we thought about how to get out of the situation when we could fly again.

– What are the main changes in Air Baltic, comparing the company before the pandemic and today?

– When we changed our business plans, we reduced the number of employees by 40%, that is, 700 people. With 97 percent. we reached an agreement on the termination of the employment contract on the condition that they return to work within one year.

Also 40 percent. we have reduced our capacity. We terminate our cooperation with Boeing and Bombardier Q400 turboprop aircraft. Now we have focused on a model airplane, the Airbus A220.

Of course, we still had to develop new health and safety procedures for flights. We had to make sure we had enough masks. We were the first to fly from the Baltic countries to China, from where we flew with masks.

That was very important at the time. The passengers appreciated that we have prepared a safety package for each of them. Remember that the lack of masks was a problem at the beginning of the pandemic.

– Where were the Air Baltic planes in spring and summer? Have you found a way to recruit them?

– We have two Boeing planes leased. We pay for them, but we will reimburse you before the end of the year. We have two more Boeing planes as owners. We are going to sell them. We already have buyers who will pick them up in the next 2 months.

As for the Q400, we have 12 of them, they are all stationed in Riga. Their lease expires in 2022 and 2023. We are paying for them and although we wanted to return them sooner, no agreement has yet been reached.

All Airbus planes were stationed in Riga. After resuming flights, four initially flew. Then one by one I contributed each week, and now 21 of the 22 planes we have are flying.

By the way, a new Airbus will be presented to us next week, and by the end of the year we will receive two more. So in December 2020, we will have 25 Airbus A220 aircraft.

– It has already been announced that Air Baltic will resume flights in some directions. Could you tell me how it went?

– As I mentioned, we started with four planes. We have tried to be flexible so that we can react quickly to the Covid-19 situation in each country. We are also closely monitoring the restrictions that are being applied.

For example, in Lithuania we resumed operations in an even stronger position than before the pandemic. We immediately had 20 percent. market when we previously had 9 percent. The situation was similar in Estonia and Latvia.

By the way, in Latvia until August 7, we had more restrictions: we could not fly to countries with 100,000 cases. exceeds 25. Now that prohibition no longer exists, but we still cannot fly to Spain, Malta and Israel.

We are currently serving all other countries. So now we have 35 destinations from Riga, 10 from Vilnius and 7 from Tallinn. In total, there are 52 addresses.

– What percentage of Air Baltic shares is currently owned by the Latvian government?

– Today it is almost 97%, because in July 250 million. The company’s share capital was increased by 1 billion euros, which was just a government investment. Private investor Lars Thuesen did not contribute to this, leading to a decrease in his stake.

– Has the fact of being a state-owned company influenced decision-making through quarantine?

– Since 2011, Air Baltic is managed entirely as a private and independent company. We have a supervisory board elected by our shareholders, but it is made up of experts only, there are no politicians on it. Therefore, our shareholders participate in the activities of the company only once a year, during the shareholders’ meeting.

Although Air Baltic is owned by the Latvian state, it is an international company with international management.

– Do you have predictions about the future of the airline?

– I think that in a few years we will see more passengers than in 2019. Now we are experiencing a crisis, but it will end and we will recover.

I also hope that a coordinated approach to travel at European level will emerge in the near future. This could be done by the European Commission. Then short-haul flights would return, followed by long-haul ones.

I have no doubt that our century-old industry will rebound and be at an even higher level than before.