The world’s largest Airbus A220 operator, Latvian airline airBaltic, is aiming for further expansion of its single-type fleet. Specifically, the airline intends to place an aircraft order for at least 30 more of its Canadian-developed single-aisle passenger jets through the exercise of its current contract options with Airbus, but only if its IPO is successful.
First IPO by a European airline in almost a decade
From the beginning of this year, airBaltic initially wanted to position itself for an IPO, with a view to an IPO this fall. However, the schedule has since been pushed back to sometime in the second half of next year. And if the deal goes through, the airline will announce the first major airline IPO in Europe since low-cost carrier Wizz Air’s offerings nearly a decade ago in 2015.
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With the planned IPO still in the works until the end of next year, airBaltic has not yet fully disclosed what the valuation would be and how much could potentially be increased. What is certain, however, is that if the fresh equity from the IPO is successfully secured as planned, the airline will be in a better financial position to take on more aircraft and continue to advance towards its goal of hosting a fleet of 100 aircraft by 2030.
Photo: airBaltic
Possible consolidation of contractual options
In an exclusive interview with Reuters, AirBaltic Chief Executive Officer Martin Gauss said the airline plans to purchase about 30 Airbus A220s by cementing its existing contract options with Airbus. And Gauss hints that airBaltic will take options for at least 20 more aircraft on top of the current options, giving the company the potential to expand its fleet to 100 Airbus A220s as planned.
The airline boss also indicated that he is interested in negotiating an option with Airbus to switch some orders to a stretched version of the Airbus A220, specifically the -500 variant if available. Although the aircraft manufacturer has not yet confirmed if and when it will offer a stretched variant, airBaltic emphasizes that it would fully support it if the concept were to come to fruition.
Meanwhile, Gauss states that all current aircraft orders would be for the Airbus A220-300 variant. Unfortunately, it has been confirmed that the expected order will not come during this month’s Paris Airshow.
Photo: airBaltic
I’m trying to fill the gap
The need for an expanded fleet has never been more urgent for the Latvian airline as summer approaches and demand for air travel remains strong. Unfortunately, while high demand is a positive for any airline, disruptions in the global supply chain have led to significant shortages of aircraft spare parts. As a result, airlines have had to ground some of their fleets because routine repairs could not be carried out.
airBaltic was not spared from this consequence, after delays in the procurement of spare engine parts forced the company to ground eleven of its Airbus A220s. Although the number may seem small, it accounts for a good quarter of the fleet. Faced with this significant capacity squeeze in the midst of the peak travel season, the airline has also been forced to lease older aircraft and crew from other airlines.
Source: Reuters
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Photo: airBaltic
airBaltic
IATA/ICAO code: BI/BTI
Airline type: hybrid carrier
Stroke(s): Riga International Airport
Founding year: 1995
CEO: Martin Gauss
Country: Latvia
Photo: airBaltic
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