The government of Latvia has approved an investment of €90 million into state-owned carrier airBaltic.

The money will be used to compensate for the losses caused by the ongoing Covid-19 pandemic and to overcome the ongoing economic crisis.

Martin Gauss, chief executive of airBaltic, said: “The support of our majority shareholder to overcome the crisis reflects the recognition of the positive impact airBaltic has on the economy.

“The investment is planned to be returned to the Latvian state in form of proceeds from selling shares during a planned initial public offering of airBaltic in the future.”

The funding is subject to the approval of the European Commission.

Gauss added: “When the pandemic started in 2020, the company performed a significant cost reduction program and preserved around 1,000 employees which were required to maintain the operation of the airline.

“The equity received in 2020 has been used responsibly to maintain operations and cover expenses that could not have been avoided due to the Covid-19 pandemic.”

airBaltic is a strategic facilitator of the Latvian economy and is responsible for more than 2.5 per cent of the Latvian GDP.

Due to the Covid-19 pandemic the number of passengers carried by airBaltic decreased by 73 per cent in 2020, and significantly influenced operations.