Posted on: 23 September 2011 by Ross McSweeny
The legal protection plan filed airBaltic on 21 September has been rejected by the Latvian court, though the airline is firm in its intention to continue operations.
In Latvia, the legal protection procedure differs from the United States’ Chapter 11 procedure. The legal protection procedure in Latvia is essentially a court-approved business plan. If approved, it would allow for capital increase in the company and payments to suppliers and creditors.
As a result of an extraordinary Cabinet meeting on September 22, the Latvian government announced it is interested in continued operations of the airline, and continued negotiations with the private investor on the capital increase in the airline, though it admitted to also evaluating the establishment of a new airline.
airBaltic CEO Bertolt Flick (pictured) stated, “It is now no longer surprising why a solution regarding airBaltic has not been reached for more than six months, while at the same time details of the new airline will be clear within the coming days at the earliest and within two weeks at the latest, according to the government’s consultant. Confidence in Latvia’s national airline has been methodically and systematically undermined in the public rhetoric in order to pave the way for a potential new project.
“The Board of airBaltic will continue operations of the airline. The Board is currently in negotiations with all the stakeholders of the airline. All of them are ready to support the airline in the future. The legal protection plan, rejected by the court, was a step taken by airBaltic’s Board to break the blockage and go ahead with negotiations, in order to agree on the future of airBaltic,” Flick commented.