Latvian PM criticises state role in Air Baltic amid financial rescue

During an extraordinary parliamentary session on 20 August, Latvia's prime minister, Andris Kulbergs, expressed frustration over the government's continued financial involvement with national carrier Air Baltic.

Lawmakers at the session voted in favour of legislation enabling urgent financial stabilisation measures for the airline. The law gives the government authority to extend the repayment deadline on a €30 million loan issued earlier this year. About €18 million of that loan remains outstanding, and it had been due by 31 August.

The legislation also permits the state to take part in further interim financing. This could happen either by purchasing €30 million in newly issued bonds or by converting some existing debt into equity.

Kulbergs said he had devoted a significant share of his time to the airline's problems. He described it as one of the biggest challenges facing his government, and said he had not had sufficient access to information to make decisions in the country's interest.

He argued that the state, and Latvia in particular, should not be involved in the aviation business, saying taxpayer money had already been lost. Still, he said abandoning the airline now would be the easiest option, but also the most irresponsible one, given the thousands of jobs at stake and the carrier's role in the economy.

Kulbergs described the intervention as giving the airline a last chance to stabilise its finances.