airBaltic Latvia prepares for London listing in second quarter

Riga-based airline airBaltic, based in Latvia, is expected to launch its initial public offering (IPO) in the second quarter of this year and has chosen the London Stock Exchange for this purpose, sources quoted by Bloomberg say, according to ch-aviation.com.

The company is also considering a dual listing, with the Riga Stock Exchange (Nasdaq Riga) being the likely candidate.

The airline hopes to raise 300 million euros ($327 million) through the IPO. The Latvian government plans to retain a minority stake after the listing, namely 25% plus one share. The Latvian state currently owns 97.97% of airBaltic.

German airline Lufthansa, which recently agreed to invest 14 million euros for a 10% stake in airBaltic, will retain at least 5% of the company following the IPO, the source said.

airBaltic recorded a net loss of 118.2 million euros in 2024, in contrast to a profit of 33.7 million euros in 2023. Revenue, however, increased from 668 million euros in 2023 to 747.6 million euros in 2024. airBaltic carried 5.1 million passengers on its network in 2024, 13% more than the previous year.

The airline highlighted that the biggest challenges it faced last year were increased competition, the consequences of the war in Ukraine and problems with Pratt & Whitney engines. Airbus aircraft of the A320neo and A220 families equipped with Pratt & Whitney engines have faced multiple technical problems, the most serious being defects in internal components, in particular in the discs and blades of the high-pressure turbine. The airline expects these problems to last throughout 2025, but also in 2026.

Accelerated depreciation of Pratt & Whitney engines caused a negative financial impact in 2024, estimated at 40.5 million euros, which is expected to reach 80 million euros in 2028.

According to ch-aviation, airBaltic operates 50 A220-300 aircraft, 13 of which are currently inactive. Another 40 aircraft are on order by the carrier.

Martin Gauss, President and CEO of airBaltic, stated in August 2024: "For the first time in the company's history, airBaltic intends to operate a fleet of almost 100 A220-300 aircraft, and these exercised options are the next step in the right direction. Over the years, this aircraft type has proven its operational capabilities and value - it has been the basis of our operations and has played a key role in airBaltic's international success story. By confirming these purchase options, we are strengthening our strong support and confidence in the A220 program and look forward to expanding our fleet in the coming years." The Latvian airline has a long history of operating the Airbus A220-300, having been a customer since the aircraft's launch in 2016. Since 2020, the airline has operated an exclusive A220 fleet. airBaltic is the largest A220 customer in Europe. The A220 is the most modern airliner in its class, carrying between 120 and 150 passengers on flights of up to 6,700 km. The aircraft has the largest cabin, seats and windows in its class, ensuring superior comfort.