Brussels approves E45m recap’n of Latvia’s airBaltic

The EC has approved the second half of a E90m recapitalisation package to airBaltic under temporarily slackened European Union state aid rules to businesses hard hit by the Covid-19 pandemic, the commission said in a statement. The E45m is half of the sum that the Latvian flag carrier said in December was “still subject to the approval of the European Commission” and was itself split into two measures: E11.6m to cover damage suffered between June 16, 2020, and June 14, 2021; and E33.4m for the period to the end of June 2022. The other E45m was approved in December. The funding will be injected in return for new state-held shares and tops up the government’s emergency investment of E250m in the company’s equity at the height of the crisis in 2020. “Due to the coronavirus pandemic and the travel restrictions that Latvia and other countries had to impose to limit the spread of the virus, airBaltic incurred significant operating losses and experienced a steep decline in traffic and profitability and is currently facing a serious risk of default and insolvency,” the commission explained in its May 24 statement. “With its main hub at Riga airport, airBaltic is the largest airline in Latvia and plays a major role in the Latvian economy, notably because it ensures essential connectivity services within Latvia and from/to Latvia to other European and international destinations,” it added.<br/>