AirBaltic stalls IPO until at least the first half of 2025

AirBaltic is pushing its planned initial public offering back to the first half of 2025 or later as its advisers suggest waiting for improved market conditions in the European sector.

The Latvian airline, which had previously said it would consider an IPO in the second half of 2024, will instead look to do it "if there's a better outlook for European airlines", airBaltic Chief Executive Martin Gauss told Reuters on Monday.

That means the timing of the planned flotation could stretch into the second half of next year, or even later, although an announcement on its pre-IPO investor could come sooner, Gauss said, adding this could technically till be this month.

Reuters previously reported that Germany's Lufthansa was one of the companies in talks for a strategic investment in airBaltic.

European airlines have struggled with supply chain delays, labour disruption, surging prices and limits to airspace this year, with many reporting weaker than expected financial results, putting pressure on sector valuations.

ENGINE WOES

Gauss added that the ongoing inspections to RTX's Pratt and Whitney engines are dragging out and that the company's compensation is not enough to make up for airBaltic's loss in revenue from grounding the affected planes.

Two years ago, he said airBaltic would have expected the engine issues to have been addressed by now. He is being told by executives that the inspections could drag on for another two years.

He is hopeful, however, that the European airline market will recover in the year ahead as demand remains strong, adding that he is counting on the new European Commission to improve economic competitiveness across the EU.