The Latvian government has announced its intention to conduct an initial public offering (IPO) for the national airline Air Baltic before the end of this year. Following the IPO, the state’s ownership in the airline will be reduced from its current 97.97% to 25% plus one share, according to a decision made in a closed session on August 30, as reported by LTV.

Minister of Transport Kaspars Briškens indicated that the IPO process will run concurrently with negotiations with a “strategic investor,” though details about this investor remain undisclosed. The extent of the strategic investor’s acquisition is also not yet known. At present, the Latvian state holds a majority stake of 97.97% in Air Baltic, while Danish businessman Lars Thuesen, through “Aircraft Leasing 1,” controls the remaining 2.03%.

The prospect of an Air Baltic IPO has been a recurring topic over the years, but previous attempts have been thwarted by unfavorable economic conditions. The government’s decision to proceed with the IPO reflects current market confidence and aims to finalize the offering within the next four months.

Despite an increase in revenue and passenger numbers, Air Baltic reported a loss of 88 million euros for the first half of 2024. The airline operates a network of over 130 routes from its hubs in Riga, Tallinn, Vilnius, and Tampere. Founded in 1995, Air Baltic boasts a fleet of 48 Airbus A220-300 aircraft, noted for being one of the youngest fleets in Europe—a potential asset for attracting the strategic investor.

The IPO is expected to mark a significant shift in Air Baltic’s ownership structure and strategic direction. The outcome of the IPO and the identity of the strategic investor will be pivotal in shaping the future of Latvia’s national airline.