Next airBaltic CEO should have additional focus on efficiency - interim chairman

RIGA - The next CEO of Latvia's national carrier airBaltic should have an additional focus on ensuring efficiency, Andrejs Martinovs, chairman of the company's interim supervisory board, told LETA.

He said that new requirements for the next airBaltic CEO would be defined in the next coming days.

Martinovs added, however, that airBaltic needs just as good and professional CEO as its former head Martin Gauss, but that perhaps it would be necessary to also focus on ensuring efficiency.

Martinovs indicated that a call for tenders will be announced soon and the selection process will certainly be broad. "We will not be looking for a good candidate, but an excellent candidate," Martinovs added.

At the same time, he explained that airBaltic managers must continue to think about the interests of the company's shareholders, so that they also benefit from the airline's operations, not just indirectly but also in terms of value growth.

Commenting on whether the salary of the next airBaltic CEO would be reviewed, Martinovs said that this is a completely different issue, which is usually discussed with each individual candidate, as no two candidates are the same and no two salaries are the same.

According to Martinovs, it is too early to say how large the top manager's salary could be. "Since we are competing in the international market, and there is a decision to bring in an international professional, then we will most likely have to look at international salaries. If we limit ourselves to a candidate from the Baltic states or Germany, we have no plans to "overpay"," Martinovs added.

Asked whether firing Gauss might make it more difficult to attract potential investors, Martinovs said there should be no negative impact. "The company is well and professionally managed on other levels. I can commend the corporate governance system established by Gauss, which is at a fairly high level. Substitutability is properly ensured and in principle there should be no negative impact," Martinovs added.

As reported, the supervisory board of the Latvian national airline airBaltic on Monday dismissed the airline's CEO Martin Gauss from his job, the Transport Ministry informed LETA.

airBaltiic executive board member and COO Pauls Calitis has been appointed the airline's acting CEO. CFO Vitolds Jakovlevs also continues to serve on the company's executive board.

During the airBaltic shareholders' meeting on Monday, airBaltic's largest shareholder, the Transport Ministry, expressed no confidence in Gauss. Following the shareholders' meeting, airBaltic's supervisory board convened for an extraordinary meeting. In view of the shareholder's vote of no confidence, the supervisory board decided to dismiss the current executive board chairman Gauss, effective Monday.

airBaltic shareholders at the meeting today also approved the airline's loss of EUR 118.159 million in 2024.

airBaltic is an important company for the national economy and it must be able to develop independently and adapt to external conditions, said Transport Minister Atis Svinka (Progressives).

airBaltic supervisory board chairman Andrejs Martinovs thanks Gauss for his leadership, dedication and vision since 2011, noting that for more than a decade Gauss has led the company through significant change, laying a strong foundation for the future of the airline.

The main business objectives remain unchanged and airBaltic continues to work towards implementation of its strategy and the potential Initial Public Offering, added Martinovs.

"airBaltic acting CEO Pauls Calitis says that airBaltic continues to operate with unwavering commitment to its strategic objectives and that the company's operational performance will not be affected. He adds that the airBaltic team is strong and motivated and the airline is ready to continue stable development.

According to the Transport Ministry, Calitis is an experienced aviation professional with a 30 year career at airBaltic. Calitis joined the airline in 1995 as a pilot and later began to work in airBaltic management. In 2020, Calitis was appointed the airline's COO and became a member of the executive board.

The Transport Ministry emphasizes that the company's operations will not be affected. airBaltic is and will remain a strategically important company for Latvia, ensuring connectivity and making direct contribution to the national economy. The shareholders' objective is to improve the company's competitiveness as it continues to move towards IPO.

As reported, the Transport Ministry, airBaltic, and Lufthansa Group have signed an agreement, according to which Lufthansa Group will invest EUR 14 million in airBaltic for a minority stake, and Supervisory Board seat.

In return for its investment, Lufthansa Group will receive a convertible share granting a 10 percent stake, which will be issued at a subscription price of EUR 14 million and converted into ordinary shares upon a potential IPO of airBaltic. After IPO, the size of Lufthansa Group’s stake will be determined by market pricing of the potential IPO, with Lufthansa Group’s holding amounting to no less than 5 percent of airBaltic.

In August 2024, the Latvian government agreed that the state should retain at least 25 percent plus one share in the capital of airBaltic after the IPO.

The acquisition of a convertible share granting a 10 percent stake in national airline airBaltic by Germany's Lufthansa Group for EUR 14 million is vetted by Germany's Federal Cartel Office (Bundeskartellamt).

The Latvian state owns 97.97 percent of airBaltic's shares, while the financial investor, Danish businessman Lars Thuesen's Aircraft Leasing 1, owns 2.03 percent.

airBaltic carried 5.2 million passengers in 2024, which is an increase of 13 percent against a year before, while the number of the airline's flights rose 7 percent year-on-year to 47,000.

airBaltic Group posted an audited loss of EUR 118.159 million last year, compared to a profit of EUR 747.572 million the year before, while its revenue increased by 11.9 percent year-on-year to EUR 747.572 million, according to the information published by the company.