Nausėda: Lithuania's airBaltic investment irresponsible without recovery guarantees

Lithuania should not become a shareholder in the airline airBaltic without firm guarantees for its financial recovery, President Gitanas Nausėda stated on Friday. He stressed the necessity of evaluating all financial aspects and risks involved, acknowledging the airline's challenging situation which requires drastic cost-cutting to improve profitability. "Until such guarantees are in place, I believe it would be irresponsible to make such generous promises while we do not see how the company's rise, if one can put it that way, from the ashes and its profitable operation will be ensured," Nausėda told journalists. The President highlighted Lithuania's interest in airBaltic's success, particularly concerning the expansion of flight routes. This is especially crucial as Lithuania prepares to assume the presidency of the EU Council next year, a period expected to involve significant activity and travel. "There will be a lot of activity, a lot of travel, so smooth connectivity is a very important aspect," Nausėda said. Earlier, Prime Minister Mindaugas Sinkevičius indicated that Lithuania would consider Latvia's proposal to become a shareholder in airBaltic, provided the decision is economically sound. Transport Minister Juras Taminskas had previously described a potential Lithuanian investment in airBaltic shares as irrational and emotional. According to airBaltic's annual report, the airline halted its planned public offering of shares due to 2025 financial results and market conditions. Despite anticipated improvements in operational and commercial performance, the airline expects negative free cash flow in 2026 and requires an additional capital injection of 100-150 million euros to fund its winter season operations. The airBaltic board has approved a business plan that includes securing 225 million euros in interim financing to improve liquidity, utilizing existing collateral for priority bonds maturing in 2029.

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Until such guarantees are in place, I believe it would be irresponsible to make such generous promises while we do not see how the company's rise, if one can put it that way, from the ashes and its profitable operation will be ensured.