Lufthansa has taken a firm hold on yet another major European airline, Latvian airline airBaltic. In a deal revealed on Wednesday, the German group acquired a 10% stake in the company for 14 million euros.
In addition, Lufthansa secured a seat on the Supervisory Board of airBaltic, which is owned by the Latvian government.
The convertible share changed into ordinary shares in the event of a potential IPO of the Latvian airline. Lufthansa will be entitled to at least a 5% stake in airBaltic.
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Lufthansa and airBaltic have been partners since the two signed a wet-leasing agreement, which was recently renewed for another three years.
Under the agreement, airBaltic will make up to 21 A220-300 jets available to the Lufthansa Group, which will operate routes to various destinations in Europe.
airBaltic is the largest operator of the A220-300, the Airbus’s largest variant, in the world, with 50 aircraft.
The Latvian carrier has just signed a joint venture with Uruguay’s new flag carrier, SUA Líneas Aéreas, which will fly five A220s loaned by airBaltic from October.
New acquisitions in the pipeline
The Lufthansa Group is expanding its presence in Europe, which since January 19 has included ITA Airways, Italy’s flag carrier, which now has a 41% stake with the German carrier.
Lufthansa is also reportedly close to acquiring a 20% stake in Spain’s leisure airline Air Europa.
In addition, the state-owned TAP Air Portugal is reportedly in the company’s sights. The Portuguese government is preparing a tender for the airline soon.
