Lufthansa Group has further widened its influence in the European market by investing in airBaltic, the Latvian flag carrier.
The new agreement involves acquiring a convertible share representing a 10% stake in airBaltic at a subscription price of €14 million. It also secures a seat on the airBaltic Supervisory Board.
This strategic move strengthens the existing partnership between the two airlines, built upon a successful wet lease agreement.
The 10% Stakeholder Agreement
The convertible share is designed to transition into ordinary shares upon a potential Initial Public Offering (IPO) of airBaltic. While the final stake held by Lufthansa Group will be determined by market pricing during the IPO, it is guaranteed to be no less than 5%.
This investment allows Lufthansa Group to gain a direct equity stake in a growing and dynamic airline, providing a valuable long-term return on investment.
Benefits to Both Airlines
The enhanced partnership will provide numerous benefits for both airlines. For Lufthansa Group, it enables greater flexibility and operational efficiency. It allows them to effectively respond to seasonal demand fluctuations and expand its network reach into new and existing markets.
airBaltic, in turn, will gain access to Lufthansa Group’s extensive global network and resources, including its frequent flyer program and robust sales channels. This will significantly enhance airBaltic’s market visibility and attract a wider customer base.
Extension of Wet Lease Agreement
The recent extension of the wet lease agreement for three years beyond summer 2025 further solidifies this strategic alliance. This allows Lufthansa Group to flexibly deploy up to 21 airBaltic aircraft during peak summer seasons and five during the winter months across its various hubs.
This dynamic approach enables the airline group to effectively respond to fluctuating customer demand, particularly during peak travel periods.
By integrating airBaltic’s capacity, Lufthansa Group aims to enhance the flexibility and reliability of its route network. This will be particularly beneficial for high-demand destinations, while also strengthening connections to its intercontinental services at key hubs.
airBaltic: A Strategic Partner
AirBaltic is the flag carrier of Latvia, operating a modern fleet of Airbus A220-300 aircraft. Headquartered at Riga International Airport, the airline serves a network of over 70 destinations across Europe, the Middle East, and the Caucasus.
As the leading airline in the Baltic region, AirBaltic plays a crucial role in connecting Latvia, Lithuania, and Estonia to major European cities and beyond.
airBaltic, with its strong presence in Riga, Latvia, has proven to be a reliable and valuable partner for Lufthansa Group since 2019.
This investment further solidifies this strategic partnership, allowing both airlines to benefit from increased operational efficiency and expanded market reach.
The transaction is subject to antitrust review and is expected to close in the second quarter of this year. This investment marks a significant step for Lufthansa Group in expanding its European network. It also supports further enhancement of its competitive position in the global aviation market.
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