Pan-Baltic flag carrier still ‘ultimate goal’ for Air Baltic

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Air Baltic remains interested in exporting its brand across the region to become a pan-Baltic flag carrier, chief executive Martin Gauss says, though the form of any such entity is up for debate and domestic restructuring must take priority.

Asked to clarify the Latvian airline's pan-Baltic aspirations, Gauss tells Flightglobal: "We have a nice name, it's called Air Baltic. I think that says it all."

Latvian prime minister Valdis Dombrovskis and transport minister Aivis Ronis have both openly supported a merger between Air Baltic and Estonian Air. But Gauss has historically downplayed the appeal of a shared Baltic carrier, insisting that a structure akin to Scandinavia's SAS could not easily be replicated across Latvia, Estonia and Lithuania.

Hinting at a long-term shift in strategy, he now says: "We believe we can fulfil the needs of the Baltic region by also serving the two neighbouring countries ... But we won't do it if it doesn't work for us financially. We won't just do it for the sake of it."

In a veiled reference to Estonian Air, Gauss says that any effort to export Air Baltic's brand to its neighbours should ideally involve collaboration with domestic operators. Lithuania's flag carrier, FlyLal, suspended operations in 2009.

"We'd like to do this together," Gauss says. "That would be perfect. We can also do it alone, but we are looking for an approach which does not involve us going there and competing with whomever is there. We would like to do this in a co-ordinated way."

Efforts by Air Baltic's previous management to establish secondary hubs in Tallinn, Estonia and Vilnius, Lithuania were deemed unsuccessful and promptly abandoned. A proposed hub at Oulu airport in Finland was also shelved.

With Latvia and Estonia both now consolidating their flag carriers' networks, neither side is likely to launch a competitive assault on their neighbour's hubs - least of all given the growing threat from low-cost carriers. Longer term, however, the chief executive says the Baltic states are a "potential growth area" and he is "open to discussions in any direction".

"As soon as we believe we can do something successful ... we will look into it," he confirms. "But the company is in a heavy restructuring programme. We cannot just go ahead and spend money on some adventure."

For the time being, the pan-Baltic vision is aspirational, and Estonian Air remains a competitor. "Until recently they were serving Riga, taking passengers to Tallinn before taking them on to destinations where we also fly," Gauss notes. "What we do - taking passengers from Tallinn to Riga - they were doing the exact same thing."