Latvian airline airBaltic announced May 28 it was buying a large number of new Bombardier CS300 aircraft in a massive expansion of its fleet.
CEO Martin Gauss said that the airline was ordering an additional 30 planes to add to the 20 it already has on order, and had an option on a further 30 aircraft.
"We will be signing a contract today for 30 firm aircraft and 30 optional aircraft. That is, 60 aircraft. If we execute all options, by the year 2024 we would be operating 80 CS300 aircraft," Gauss said.
"This question immediately comes of how do you pay for them. There are two options... we can do it as did already with our [existing] eight aircraft, and use our own equity and then we will finance the aircraft and be the owner at the end.
"The second option, which we can choose, is to do sale or leaseback. As we order the aircraft we can decide what we do with the aircraft and we can say the leaseback on the aircraft. What we do with all of the aircraft, we can take that decision individually on each individual aircraft," said Gauss, "We do not have to decide today what we do - it depends on whether we want to put it on our balance sheet or whether we want to do sale and leaseback."
The purchase was part of a new business plan called Destination 2025 that would create "more than 1,000 new highly-qualified jobs," in the Baltic states and have a major impact on the GDP of the three countries, he added.
Gauss said the deal would also make airBaltic "much more attractive" to potential investors.
No headline estimate of the total costs of the deal was announced in the initial announcement but the deal for the 20 planes ordered so far is reportedly worth around 1.5 billion US dollars.
A parallel release from Bombardier did give some figures, saying: "Based on the list price of the CS300 aircraft, the firm order is valued at approximately US$ 2.9 billion. This amount would increase to nearly US$5.9 billion should all 15 options and 15 purchase rights be exercised," it said.
Transport Minister Uldis Augulis - representing the state which is the majority shareholder in the airline -was also in attendance and said the purchase would allow for rapid expansion of the business in the future.
"It's just logical to continue this development," he said in reference to the Destination 2025 plan, "This investment will be the biggest investment in Latvian history" and will contribute towards GDP growth, job creation and economic development.
You can watch the announcement in the video clip below from our colleagues at LTV news.
https://eng.lsm.lv/article/economy/tran ... s.a279917/
