Airbaltic seeks financial backer prior to initial public offering
In the upcoming period, Airbaltic is considering going public, but prior to this, they aim to secure a significant investor. Speculations about Lufthansa being this investor have been circulating in the aviation sector, with Airbaltic recently reserving nearly half of its fleet for the German airline. Airbaltic's CEO, Martin Gauss, however, remained mum on these rumors, stating that they are open to discussions with various key investors as they prepare for their IPO. Gauss had previously hinted at the possibility of Airbaltic joining a larger airline group like Lufthansa, but he now reaffirmed that he does not foresee this happening within the next five years.
Last week, reports surfaced suggesting that Lufthansa is considering investing in Airbaltic. While discussions about this potential investment before Airbaltic's planned IPO are underway, nothing is set in stone yet.
Lufthansa currently collaborates with Airbaltic in various capacities, including as a "wet lease" airline for its Swiss subsidiary, to cover flights for Lufthansa during peak times. Lufthansa has recently strengthened its partnership with Airbaltic, with plans to utilize 21 of Airbaltic's Airbus A220 aircraft in their summer flight schedule across various hubs, including Frankfurt and Munich. In the winter months, however, this leased fleet will be reduced to just five aircraft. The partnership will last for a period of three years.
Lufthansa justifies this increased use of corporate aircraft and crew due to the rising demand peaks, particularly during the summer flight schedule. By increasing their capacities, they can serve more flexible target areas in their networks.
Airbaltic announced their intention to go public as early as the end of this year or the beginning of 2025. Gauss did not provide a specific date for this move even now. The Latvian Airbaltic is headed by German manager Gauss and boasts a modern, unified fleet of 48 Airbus A220 aircraft. The majority stake in the company is held by the Latvian government.
Lufthansa's potential investment in Airbaltic could significantly impact the operations of both airline companies, as demonstrated by their ongoing collaboration and Lufthansa's planned use of 21 Airbaltic Airbus A220 aircraft in their summer schedule.
Given Lufthansa's interest in investing in Airbaltic, it remains to be seen if this will lead to a merger or closer ties between these leading airline companies in the aviation sector.
