Latvian State Steps Up: Injects €14 Million into airBaltic to Seal Lufthansa Deal and Launch IPO
The Latvian government gives the green light for a €14M co-investment in airBaltic, matching Lufthansa's bet and setting the stage for an IPO with a new CEO.
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The Government of Latvia today made a pivotal strategic decision for the future of its national airline, airBaltic, by approving a €14 million co-investment in the company. This move, the central news of the day, is designed to match and be executed simultaneously with an investment of the same amount from Lufthansa Group, thereby cementing the German group's entry as a strategic partner.
This action by the Latvian government is the definitive step that strengthens airBaltic's capital structure and clears the path for its long-awaited Initial Public Offering (IPO). By acting as a market economy operator under the MEOP principle, the state not only retains its strategic participation but also sends a powerful signal of unified confidence to the market and future investors. The full transaction, totaling €28 million, is expected to close by the end of August this year.
Minister of Transport Atis Švinka emphasized the significance of the government's decision. He explained that "when signing the agreement with Lufthansa Group, we were prepared for the possibility of a co-investment" and that the presence of an industry leader as an investor "increases the value of our national airline" and demonstrates the sustainability of its business model.
As part of this comprehensive strategy for the company's new phase, the appointment of financial expert Erno Hildén as the next Chief Executive Officer (CEO) was also confirmed, effective December 1, 2025.
What You Need to Know
What was the key news? The Latvian Government approved a €14 million co-investment in airBaltic.
Why is it so important? Because it matches the investment of the new strategic partner, Lufthansa Group, and shows the state's full backing of the airline's IPO.
What is the ultimate goal? To financially strengthen airBaltic for its stock market listing and subsequent expansion.
Who will execute the plan? The new CEO, Erno Hildén, is an aviation finance specialist from SAS.
Hildén's appointment is a direct consequence of this new financial landscape. His experience as the Group CFO of SAS Scandinavian Airlines during its complex Chapter 11 restructuring positions him as the ideal figure to manage a newly capitalized company and guide it through its public market debut.
Andrejs Martinovs, Chairman of the airBaltic Supervisory Board, and Erno Hildén himself stated their commitment to continuity and achieving the long-term objectives of the airline, which operates an all-Airbus A220-300 fleet.
Meanwhile, partners in Estonia and Lithuania are still evaluating their potential participation, which could materialize during the IPO itself. Until Hildén takes office, Pauls Cālītis will continue as interim CEO before resuming his duties as Chief Operating Officer (COO).
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