Struggling Latvian carrier Air Baltic has filed for legal protection in an attempt to enable it to continue operations despite its ongoing row with the Latvian government over a much-needed capital injection.
The airline, which has requested a Ls60 million ($115.8 million) bailout from Latvia's government - a 52.6% stakeholder in Air Baltic - said it has filed for legal protection in order to prevent the state from blocking any of the airline's decisions.
"For the past six months, the management of Air Baltic has informed about the necessity of a capital increase," said Air Baltic. "The government of Latvia as a minority shareholder in the airline has neglectfully and repeatedly delayed any decisions regarding the capital increase."
Latvia's government has said it is unwilling to inject any more capital into the airline unless chief executive Bertolt Flick steps down. Flick owns Baltijas Aviacijas Sistemas (BAS), which has a 47.2% stake in Air Baltic.
A spokesman for Latvia's prime minister said yesterday that BAS "has agreed to change the management of the airline and it appears Flick is leaving". But Flick today said that despite BAS agreeing to the government conditions, "the government again did not take a decision to participate in the capital increase of the airline, or to allow BAS to increase the capital unilaterally, but suddenly and surprisingly announced the potential sale of its shares in the airline".
Flick added that Air Baltic's management "will not change during the period of legal protection".
The Riga-based carrier has suffered considerable losses over the past year, despite a cash injection last year of Ls30 million, split between the Latvian government and BAS.
Air Baltic operates a fleet of 34 aircraft, comprising six Boeing 737-500s, eight Boeing 737-300s, two Boeing 757-200s, 10 Fokker 50s and eight Bombardier Q400s.
The airline could not be reached for comment.