Air Baltic is urging government assistance for the airline industry amid the coronavirus crisis.
As the Latvian carrier reported a net loss of €7.7 million ($8.2 million) for 2019, chief executive Martin Gauss noted that, given the sector’s vulnerability to the outbreak, “state support for airlines in general might be needed to ensure air infrastructure long-term”.
His own airline is in a “strong financial position” to deal with the crisis, he argues, but he points out that every airline is reducing costs and capacity while “some are even stopping all operations”.
Gauss stresses the role his carrier plays in the Baltic region’s economy and in ensuring connectivity for its home country. “We need to take proactive decisions to go through this difficult period and be ready to grow again when the crisis is over,” he adds.
Air Baltic suspended all flights from 17 March until 14 April following the Latvian government’s decision to halt international air traffic to the country. The carrier is also taking action to reduce its headcount as it looks to cut costs and preserve cash.
The carrier’s net loss last year compares with a profit of €5.4 million in 2018 – although it says that without the effect of currency fluctuations and new accounting standards its 2019 result would have been flat.
Revenue climbed nearly a quarter to €503 million, while passenger numbers increased 22% to 5 million.
“Our strategy is to become the number-one carrier in the Baltic states,” Gauss declares. “Last year we successfully exceeded our two main targets – to carry more than 5 million passengers and to achieve a revenue of over €500 million. It was a successful year, but now we have to continue working hard to ensure that we are able to develop further.”
Before the “exceptional circumstances” created by the coronavirus, the first two months of 2020 had brought stronger demand than anticipated in the company’s business plan.