Air Baltic has secured €250 million in state aid from the Latvian government to combat the impact of Covid-19.
The planned investment will mean that the Latvian state will raise its shareholding in the Riga-based carrier from 80% to 91%.
The deal, which is subject to European Commission approval, will see the investment provided in tranches.
“Each investment tranche will be provided in line with market rules and will not exceed the losses caused as a result of the Covid-19 crisis,” the airline said.
Chief executive Martin Gauss said: “With this new equity investment, we can begin to execute our new business plan ‘Destination 2025 CLEAN’ which focuses on a new start for Air Baltic once international flights resume.
“This will facilitate successful growth for the company once the impact of the Covid-19 crisis begins to ease.”
The new business plan foresees a reduced fleet “for the upcoming years”, initially resuming operations with 22 Airbus A220-300 aircraft.
The new plan takes into account reduced capacity for two years, while at the same time foreseeing a return to growth with up to 50 Airbus A220-300 aircraft by the end of 2023.
Gauss said: “Once travel restrictions are lifted, we intend to start our operations with only a few Airbus A220-300 aircraft.
“We then plan to gradually add one aircraft per week as demand returns. During the first week, we will fly to more than ten destinations.
“We will connect the Baltics with every major European business and leisure hub as soon as it will be possible to perform commercial flights to each of the cities.”