THE LATVIAN Government has finally signed off plans to establish a new flag carrier, due to take over from the old Latavio airline at the start of 1996.
The agreement to establish the as yet, unnamed new carrier, was officially signed at Riga on 29 August by Latvia's Minister of Transport Andris Gutmanis, the Director General of the Latvian Privatisation Agency Janis Naglis, and representatives of the foreign partners. Latvia had signaled its support for the project earlier this year (Flight International12-18 July, p10).
The share capital of the airline will be $12.1 million, with the Republic of Latvia taking a controlling 51% share. Baltic International USA (BIUSA) will take another 20%, with Scandinavian Airline System (SAS) holding 16.5%. Swedfund International and the Danish Investment Fund for Central and Eastern Europe will each hold 6.2%.
Both SAS and BIUSA have the option to increase their equity stake in the new airline. The partners will additionally provide enterprise loan commitments totaling $14 million.
Following the signing of the agreement, the partners will immediately start working on the transition from the existing Latavio operation towards the start-up of the new airline in January 1996. The fleet will consist entirely of western-built aircraft, although the exact quantity and type has not yet been identified. Baltic International flies two Boeing 727-100s.
Source: Flight International
