Posted on: 07 January 2010 by Ross McSweeny
airBaltic has reported that it transported a total of 2,757,404 passengers in 2009, some 6% more than during 2008.
Bertolt Flick, president and CEO of airBaltic, commented, “2009 was a challenging year for the aviation industry. IATA revised downwards its industry financial performance forecast several times to arrive at expected net losses of $11 billion in 2009, and $5.6 billion in 2010 making these the two worst years in the aviation history. Our industry has seen a number of high profile failures including Sterling in Denmark and flyLAL in Lithuania.
“For airBaltic, too, 2009 was a complicated year. In January 2009, SAS sold its shares in airBaltic, and this was considered by the Lithuanian business daily Verslo Zinios one of the Top 50 events in the world,” Flick noted. “This required us to redesign the strategy direction and the business itself. Furthermore, in 2009 we virtually lost our home market customers as the GDP of Latvia collapsed more than 18%, and we were forced to considerably downsize our operations in Vilnius by closing most of the routes.
“At the same time, we achieved a lot in 2009. airBaltic has successfully restructured its business to offer a transit product, and achieved over 30% passenger growth in its home base in Riga,” the CEO continued. “This success has been recognised by industry and business experts, media and customers alike – airBaltic was awarded Airline of the Year 2009/2010 by European Regions Airline Association, Finland’s business magazine Kauppalehti titled airBaltic as “Nokia of the Baltic region”, and the arrival of airBaltic was voted Event of the Year by residents of Tartu.
“airBaltic has also considerably improved its service and punctuality. The reliability is epitomised by the deals with five governments in Europe who have selected airBaltic to provide air travel for their employees. The continued good performance in December suggests that our preliminary profit will be 14 million LVL. Due to the strong development of transfer traffic, it was possible to maintain the level of passenger revenue. The profit has been greatly enhanced by the sale of different services – hotels, insurances, car rentals and so on.”
Looking ahead, Flick was not optimistic over the economic outlook. “We expect economic conditions in the Baltic markets to worsen in 2010 compared to 2009,” he forecast. “GDP will continue to decline in 2010 and no recovery can be expected until summer 2011. We will see further collapse of local passenger traffic in the Baltics, as buying power of residents diminishes due to higher taxes, lower incomes and rising unemployment.
“airBaltic will therefore open at least nine new routes to further strengthen our transit product. Our new routes will focus on niche markets in Scandinavia and the CIS where airBaltic faces a low level of competition. airBaltic will be the only serious airline in the Baltics in 2010. The new business lines of airBaltic – online travel agency airBalticTravel.com and customer loyalty programme BalticMiles – are expected to contribute considerably to 2010 result. In 2010 we will be closely looking at cost reductions by reviewing all areas of operations. In order to boost future development, a new airport terminal is required in Riga, and construction has to start as soon as possible, if Riga Airport is willing to accommodate any growth beyond 2011."
Overall, airBaltic carried 216,051 passengers in December 2009 (from Riga, Vilnius and Tallinn), representing 12% more than in the same month in 2008, when the airline transported 193,595 passengers. The load factor increased to 66% last month, 9 percentage points (pp) more than in December 2008. During the whole of 2009, the passenger load factor averaged68%, 6 pp more than in 2008.