Air Baltic posts first profit since 2018, IPO plan proceeds

Air Baltic Corp AS is pursuing its plan for an initial public offering after recording its first annual profit since 2018. 

The airline reported net income of €33.7 million ($36.6 million) last year, after a net loss of €54.2 million in 2022, it said in a stock exchange statement.

The Latvian carrier plans to refinance a €200 million bond that matures in July, and raise an additional €100 million through private or public debt markets, it said in the report. 

It has also engaged several advisers on its IPO plan with a view to strengthen liquidity and its equity base, Air Baltic said. 

“We would announce such a step earliest in the second half of 2024,” Chief Executive Officer Martin Gauss said at a press conference in Riga on Tuesday.

Air Baltic plans to list on the Nasdaq Riga and is considering a secondary listing, Chief Financial Officer Vitolds Jakovlevs said during the conference. London, Amsterdam or another exchange could be options for a dual listing but it was still early days and the airline will address the issue once investment banks are on board, he said.

Russia’s invasion of Ukraine has investors demanding higher interest rates for Air Baltic’s debt, Gauss said in January, after the airline shelved plans for a junk bond sale last year to refinance the euro bond. The airline could turn to its shareholder, the Latvian government for financing if its unable to raise the funds in the market, the company said in the report.

Air Baltic is among the carriers to be impacted by the Pratt & Whitney engine issues affecting Airbus SE aircraft. Chief Operating Officer Pauls Cālītis said the airline faced a shortage of engines last year which meant it was unable to fly all of its A220 fleet and had to temporarily lease planes in the peak summer season. Air Baltic expects the engine shortage to carry on into 2024 and impact the company’s overall performance, he said.