markl1
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Air Baltic plans to launch a new airline

Mon Jan 14, 2019 5:37 pm

Air Baltic plans to launch a new airline in Europe according to Bloomberg.

"The Latvian company aims to deploy 30 A220s at the new carrier and replicate the model that brought it success at home, where it has established Riga as a hub for flights between Europe and central Asia, Chief Executive Officer Martin Gauss said in an interview."

Source: https://www.bloomberg.com/news/articles/2019-01-09/air-baltic-mulls-new-european-airline-funded-by-private-equity
 
lhrsfosyd
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Re: Air Baltic plans to launch a new airline

Mon Jan 14, 2019 6:39 pm

I can only imagine such business model to work well in former Yugoslavia area where low cost options are limited and national carriers make heavy losses.
 
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lightsaber
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Re: Air Baltic plans to launch a new airline

Mon Jan 14, 2019 6:39 pm

I wonder if they found a limit with a regional name? The description implies Eastern Europe, but if it works, perhaps a UK airline in say 2025?

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adamblang
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Re: Air Baltic plans to launch a new airline

Mon Jan 14, 2019 7:25 pm

"replicate the model that brought it success at home"
Why does Air Baltic need a new airline to continue to do the thing it's already doing? Weird.
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MalevTU134
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Re: Air Baltic plans to launch a new airline

Mon Jan 14, 2019 7:34 pm

Wasn't Air Baltic on the verge of bankruptcy just a few years back?
 
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PatrickZ80
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Re: Air Baltic plans to launch a new airline

Mon Jan 14, 2019 7:52 pm

lhrsfosyd wrote:
I can only imagine such business model to work well in former Yugoslavia area where low cost options are limited and national carriers make heavy losses.


Low cost options limited in former Yugoslavia? Wizzair holds a very strong footprint in that area and other LCCs like EasyJet and Ryanair serve it too, but not as extensive as Wizzair. It's certainly not underserved when it comes to LCCs.

AirBaltic can be seen as a hybrid carrier, inbetween an LCC and a legacy. Not quite as low-cost as an ULCC and not quite as luxury as a legacy. This new airline, as far as I understood, would be an ULCC to compete with Ryanair and Wizzair.
 
smbukas
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Re: Air Baltic plans to launch a new airline

Mon Jan 14, 2019 8:14 pm

I think we should read this news in a different way.

BT is offering help for any investor who is willing to start up an airline - that's what they say.

What BT is offering is know-how, expertise and right to take 30 A220 at a good price. BT made an order to their own needs and order was made still with Bombardier when CS program did not have momentum. They also added the option of 30 of additional aircraft which is not needed for airBaltic. I believe these options are contracted at good conditions. As A220 now is booming and proves to be successful aircraft it really may be an attractive option for a startup to work with airBaltic.
 
lhrsfosyd
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Re: Air Baltic plans to launch a new airline

Mon Jan 14, 2019 8:28 pm

PatrickZ80 wrote:
lhrsfosyd wrote:
I can only imagine such business model to work well in former Yugoslavia area where low cost options are limited and national carriers make heavy losses.


Low cost options limited in former Yugoslavia? Wizzair holds a very strong footprint in that area and other LCCs like EasyJet and Ryanair serve it too, but not as extensive as Wizzair. It's certainly not underserved when it comes to LCCs.

AirBaltic can be seen as a hybrid carrier, inbetween an LCC and a legacy. Not quite as low-cost as an ULCC and not quite as luxury as a legacy. This new airline, as far as I understood, would be an ULCC to compete with Ryanair and Wizzair.


You might want to have a look at low cost options in Zagreb and Sarajevo.

Furthermore, Ljubljana's low cost options are limited to three cities and Tirana's low cost options are also very limited.
 
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PatrickZ80
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Re: Air Baltic plans to launch a new airline

Mon Jan 14, 2019 8:56 pm

lhrsfosyd wrote:
You might want to have a look at low cost options in Zagreb and Sarajevo.

Furthermore, Ljubljana's low cost options are limited to three cities and Tirana's low cost options are also very limited.


There's always exceptions. Everywhere in Europe there are airports that have little LCC presence and airports that have a lot of LCC presence. If one airport doesn't have LCCs, you simply look at the next airport.

Ljubljana and Zagreb indeed have limited LCC presence. Guess what? Just down the road there's Rijeka with a lot more LCC presence. Tirana may not have much, but Ohrid has a lot more. Just look a but further than one airport and you easily see the LCCs.
 
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OA940
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Re: Air Baltic plans to launch a new airline

Mon Jan 14, 2019 8:59 pm

lhrsfosyd wrote:
PatrickZ80 wrote:
lhrsfosyd wrote:
I can only imagine such business model to work well in former Yugoslavia area where low cost options are limited and national carriers make heavy losses.


Low cost options limited in former Yugoslavia? Wizzair holds a very strong footprint in that area and other LCCs like EasyJet and Ryanair serve it too, but not as extensive as Wizzair. It's certainly not underserved when it comes to LCCs.

AirBaltic can be seen as a hybrid carrier, inbetween an LCC and a legacy. Not quite as low-cost as an ULCC and not quite as luxury as a legacy. This new airline, as far as I understood, would be an ULCC to compete with Ryanair and Wizzair.


You might want to have a look at low cost options in Zagreb and Sarajevo.

Furthermore, Ljubljana's low cost options are limited to three cities and Tirana's low cost options are also very limited.


Yea but Tirana is wayyy too small for an airline to have a very big operation there, and it most definitely cannot support 30 A220s. Also Adria's prices aren't that bad (at least from my limited experience).

They'll probably do Eastern Europe, and according to the article they'll probably bring along the hybrid model they have in Riga. I mean Aegean and Belavia have pulled it off pretty good in the East so I believe they could make it work. Problem is that there aren't that many countries in that area that can support 30 A220s, unless they plan to become the Moxy of Europe.
A350/CSeries = bae
 
lhrsfosyd
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Re: Air Baltic plans to launch a new airline

Mon Jan 14, 2019 9:09 pm

PatrickZ80 wrote:
lhrsfosyd wrote:
You might want to have a look at low cost options in Zagreb and Sarajevo.

Furthermore, Ljubljana's low cost options are limited to three cities and Tirana's low cost options are also very limited.


There's always exceptions. Everywhere in Europe there are airports that have little LCC presence and airports that have a lot of LCC presence. If one airport doesn't have LCCs, you simply look at the next airport.

Ljubljana and Zagreb indeed have limited LCC presence. Guess what? Just down the road there's Rijeka with a lot more LCC presence. Tirana may not have much, but Ohrid has a lot more. Just look a but further than one airport and you easily see the LCCs.


I'm aware of low cost alternatives located in another cities, the fact of the matter is that the main airports have little or no LCC presence and that is where a new start up could build a market share.
 
lhrsfosyd
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Re: Air Baltic plans to launch a new airline

Mon Jan 14, 2019 9:11 pm

OA940 wrote:
lhrsfosyd wrote:
PatrickZ80 wrote:

Low cost options limited in former Yugoslavia? Wizzair holds a very strong footprint in that area and other LCCs like EasyJet and Ryanair serve it too, but not as extensive as Wizzair. It's certainly not underserved when it comes to LCCs.

AirBaltic can be seen as a hybrid carrier, inbetween an LCC and a legacy. Not quite as low-cost as an ULCC and not quite as luxury as a legacy. This new airline, as far as I understood, would be an ULCC to compete with Ryanair and Wizzair.


You might want to have a look at low cost options in Zagreb and Sarajevo.

Furthermore, Ljubljana's low cost options are limited to three cities and Tirana's low cost options are also very limited.


Yea but Tirana is wayyy too small for an airline to have a very big operation there, and it most definitely cannot support 30 A220s. Also Adria's prices aren't that bad (at least from my limited experience).

They'll probably do Eastern Europe, and according to the article they'll probably bring along the hybrid model they have in Riga. I mean Aegean and Belavia have pulled it off pretty good in the East so I believe they could make it work. Problem is that there aren't that many countries in that area that can support 30 A220s, unless they plan to become the Moxy of Europe.


No one said all aircraft would be based in a single city and not all aircraft are arriving at the same time.
 
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PatrickZ80
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Re: Air Baltic plans to launch a new airline

Mon Jan 14, 2019 9:18 pm

lhrsfosyd wrote:
I'm aware of low cost alternatives located in another cities, the fact of the matter is that the main airports have little or no LCC presence and that is where a new start up could build a market share.


I seriously doubt that. There's a reason those airports got little or no LCC presence, often they're very expensive. As an LCC it's natural to pick the cheaper airports. I've once been told that Zagreb is about as expensive as Heathrow, no LCC wants to fly there. With such high costs they wouldn't be able to offer low fares without making a loss.

Zagreb makes plenty of money on the legacy airlines flying there, why would they want an LCC? LCCs are always looking for airports cutting them a deal. Zagreb doesn't want LCCs, so they simply don't cut them a good deal. They simply say, these are our prices, no discount possible. While at the same time another airport offers them lower prices to begin with and then also offers them a discount on those prices. A simple choice if you ask me.
 
Blerg
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Re: Air Baltic plans to launch a new airline

Mon Jan 14, 2019 9:20 pm

lhrsfosyd wrote:
PatrickZ80 wrote:
lhrsfosyd wrote:
You might want to have a look at low cost options in Zagreb and Sarajevo.

Furthermore, Ljubljana's low cost options are limited to three cities and Tirana's low cost options are also very limited.


There's always exceptions. Everywhere in Europe there are airports that have little LCC presence and airports that have a lot of LCC presence. If one airport doesn't have LCCs, you simply look at the next airport.

Ljubljana and Zagreb indeed have limited LCC presence. Guess what? Just down the road there's Rijeka with a lot more LCC presence. Tirana may not have much, but Ohrid has a lot more. Just look a but further than one airport and you easily see the LCCs.


I'm aware of low cost alternatives located in another cities, the fact of the matter is that the main airports have little or no LCC presence and that is where a new start up could build a market share.


'Issue' with these two airports is that they are not after LCC customers, they openly said so. They are not willing to lower their fares so airlines are welcome to launch flights only as long as they pay the full price. As for ZAG, they are sandwiched between ZAD, BNX, TZL and OSI which are LCC airports. FR's expansion at BNX will be a big problem for ZAG as many passengers from Republika Srpska used it for flights.

As for SJJ, they have a €10 tax on top of the regular tax which is used for airport infrastructure improvement. Also, the airport is closed between 23.00 and 06.00.

Like others mentioned before, these two airports chose not to have many LCCs. BT would fail in ex-Yugoslavia as they wouldn't bring anything new to the table, especially not now when easyJet seems to be expanding in some places like Belgrade or Ljubljana.
 
VSMUT
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Re: Air Baltic plans to launch a new airline

Mon Jan 14, 2019 9:24 pm

IMHO, Germany and Scandinavia are ripe for another contender. These markets tend to be dominated by a few airlines that have centralized everything to a few major hubs. Just taking my own home airport as an example, you can barely go anywhere without connecting through Amsterdam, Paris, Frankfurt or Copenhagen (or flying with Ryanair :vomit: ). At the same time, Scandinavians spend more money on travel than anywhere else. Even major airports like Hamburg or Berlin have a distinct lack of home-airlines other than ULCCs.

OA940 wrote:
Yea but Tirana is wayyy too small for an airline to have a very big operation there, and it most definitely cannot support 30 A220s. Also Adria's prices aren't that bad (at least from my limited experience).


This is probably going to be more of a Ryanair/EasyJet model with a few aircraft at several bases, not all 30 in one.
 
lhrsfosyd
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Re: Air Baltic plans to launch a new airline

Mon Jan 14, 2019 10:32 pm

PatrickZ80 wrote:
lhrsfosyd wrote:
I'm aware of low cost alternatives located in another cities, the fact of the matter is that the main airports have little or no LCC presence and that is where a new start up could build a market share.


I seriously doubt that. There's a reason those airports got little or no LCC presence, often they're very expensive. As an LCC it's natural to pick the cheaper airports. I've once been told that Zagreb is about as expensive as Heathrow, no LCC wants to fly there. With such high costs they wouldn't be able to offer low fares without making a loss.

Zagreb makes plenty of money on the legacy airlines flying there, why would they want an LCC? LCCs are always looking for airports cutting them a deal. Zagreb doesn't want LCCs, so they simply don't cut them a good deal. They simply say, these are our prices, no discount possible. While at the same time another airport offers them lower prices to begin with and then also offers them a discount on those prices. A simple choice if you ask me.


You do not understand my post. Air Baltic wants to replicate its Baltic model and that is to set a hub and spoke system. The only reason I mentioned low cost carriers is because of their absence which consequently leads to a higher yield. You have misunderstood what I wrote and assumed I proposed setting up a low cost airline in airports that lack any major low cost player.
 
a350lover
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Re: Air Baltic plans to launch a new airline

Sun Jan 27, 2019 6:18 pm

Well... this is a very interesting move, hard to figure out what Air Baltic has in mind...

It is quite right to say that the European market is rather congested and pretty well covered - look at Easyjet and Ryanair last week's statements, including profit warning from the Irish. Said that, Air Baltic has truly transformed from a very regional player into a legacy with low-cost costs operator who has a nice share of the market in the Baltics. Despite the large presence of Ryanair in Eastern Europe, somehow FR did not open any bases either in RIX or in TLL. Lithuania, for some reason, became an interesting country for Ryanair, with the maintenance hangar and the Kaunas base. I believe the fact that Air Baltic accelerated the expansion and grow with a nice fleet helped a lot. They have a remarkable presence in Tallin, although that market is quite unice. Air Baltic did not move quickly enough after Estonian air ceased operations fact which benefitted LOT via Nordica. I am not an expert on culturally knots between the Baltics, but I believe Estonia is the least "sovietic" if that makes any sense? Maybe Estonians did not like much the Air Baltic brand.

Places where they could deploy some more presence? I think some of the markets Wizz targets via A320s can be some more regional, so Air Baltic could serve them well if ever Wizz looked at acquiring the Latvian carrier. Wizz has bases in countries where they might want to look at domestic services, but I am unsure whether the A320 (even more the A321) fleet is correct. I am thinking of places like Bulgaria, Romania or the Ukraine, where they could target domestic routes via smaller planes like the CS200?

Air Baltic could also be a nice operator for Scandinavia in case Norwegian collapsed. Wideroe has a strong network in the domestic Norwegian market, but maybe the Norwegian State would like something a bit bigger to complement it, like Air Baltic. Even SAS could use the workforce of the Latvian carrier in order to cut costs down.

Only time will tell... ;)
 
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LH748
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Re: Air Baltic plans to launch a new airline

Sun Jan 27, 2019 7:19 pm

That's how bad stories begin
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SteelChair
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Re: Air Baltic plans to launch a new airline

Sun Jan 27, 2019 7:26 pm

I wondered at the time they placed the order what they intended to do with those additional airplanes. I seem to remember posting and thinking, "there is not enough ramp space and gates at RIX for all those planes." Well, it appears that they were never intended for airBaltic.

The big questions for me is how far along their planning is, do they have an airport identified, are they just seeking startup capital? Or did they order the planes on speculation and they haven't identified an airport yet?
 
c933103
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Re: Air Baltic plans to launch a new airline

Sun Jan 27, 2019 7:27 pm

Elsewhere in Europe ... Like the new Istanbul airport?
When no other countries around the world is going to militarily stop China and its subordinate fom abusing its citizens within its national boundary, it is unreasonable to expect those abuse can be countered with purely peaceful means.
 
Amiga500
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Re: Air Baltic plans to launch a new airline

Tue Jul 02, 2019 3:17 pm

In other news, Air Baltic now has dominance over the Baltics as Nordica goes charter/lease only and hands its routes to LOT.
 
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lightsaber
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Re: Air Baltic plans to launch a new airline

Tue Jul 02, 2019 3:26 pm

Has anything happened with this proposal of a 2nd airline? To myself, this now looks like a funding attempt.

Lightsaber
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Blerg
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Re: Air Baltic plans to launch a new airline

Tue Jul 02, 2019 3:37 pm

Amiga500 wrote:
In other news, Air Baltic now has dominance over the Baltics as Nordica goes charter/lease only and hands its routes to LOT.


I think the Baltics are anyway underpopulated in order to sustain two local carriers. BT plus LCC options should be enough to cover their needs. I hope BT gave up on this idea as it would make little to no sense.
 
dfpinto
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Re: Air Baltic plans to launch a new airline

Tue Jul 02, 2019 3:39 pm

Is there any news on this potential new hub airline? Five months have passed since the news came out...
 
dfpinto
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Re: Air Baltic plans to launch a new airline

Tue Jul 02, 2019 3:47 pm

It occurred to me that some crazy investor could try a SkyEurope 2.0 out of BTS. It is geographically in the center of Europe, thus a good location for a small regional hub.

I know, it is 50km away from the bloodbath at VIE, but there's a much lower cost base in the Slovakian side of the border and the Bratislava Region is actually doing quite well economically (thanks to the proximity of VIE airport, ironically).
 
T4thH
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Re: Air Baltic plans to launch a new airline

Tue Jul 02, 2019 4:18 pm

Please note, according AirBaltic ceo, the whole story was "fake" or misunderstanding by reporters. he had denied the story as wrong.was published around 2??? month ago or so?

I am still in office, I will have to verify later back at home, if I will be able to find the story again. (I am not any more sure, if story was in German news, I will have to search).
 
davidjohnson6
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Re: Air Baltic plans to launch a new airline

Tue Jul 02, 2019 6:19 pm

Far better to have a small misunderstanding with a few journalists than to lose (potentially) a huge pile of cash...
 
T4thH
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Re: Air Baltic plans to launch a new airline

Tue Jul 02, 2019 6:30 pm

T4thH wrote:
Please note, according AirBaltic ceo, the whole story was "fake" or misunderstanding by reporters. he had denied the story as wrong.was published around 2??? month ago or so?

I am still in office, I will have to verify later back at home, if I will be able to find the story again. (I am not any more sure, if story was in German news, I will have to search).


Back home.

I have found it: and yes, it is in German.
http://www.austrianaviation.net/detail/air-baltic-dementiert-gruendung-einer-tochter/
Anfang des Jahres berichtete unter anderem die Nachrichtenagentur Bloomberg News, dass die lettische Fluggesellschaft Air Baltic die Gründung einer Tochtergesellschaft zur Durchführung von Lowcost-Flügen außerhalb des Baltikums beabsichtigt. Firmenchef Martin Gauss erklärte dazu im Gespräch mit AviationNetOnline, dass es sich um eine von Medien verbreitete Fehlinformation handelt.

In short: The story, at begin of the year published by several newsservices (including Boomberg News), Air Baltic is planning to form a sister Airline to perform low-cost flights, outsite of the Balticum, is wrong. Ceo Gauss confirms, these are wrong Information published by news services.

rest of it in short
He confirms, they are looking for a base in western europe, (but still no decission found, if) in this case, they will use the options for order of the A220 ((please note, these are purchase rights according to my knowledge) to establish the new base. In this case, they will fly under the name Air Baltic.

Al other information is general and already known.

So, expansion with one new base in west europe, yes (still in planning stage)
New low cost airline: NO!

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