AirBaltic in pre-IPO discussions with strategic partner, CEO confirms

AirBaltic is engaged in pre-IPO talks with a strategic partner, as confirmed by CEO Martin Gauss. The discussions are part of the airline's preparations for an initial public offering, aiming to bolster growth and expansion. This move signifies AirBaltic's efforts to strengthen its market position and attract investment, as it plans its next steps towards becoming a publicly traded company.

LONDON, Sept 16 (Reuters) – Latvian airline airBaltic is currently in pre-IPO discussions with a strategic investor, as confirmed by CEO Martin Gauss on Monday. He did not comment on speculation that Lufthansa was involved in these talks.

"In our case, we are speaking to one strategic pre-IPO investor," Gauss said during an interview in London. He added that during IPO preparations, airBaltic may engage with other anchor and cornerstone investors as well.

Gauss has previously mentioned that airBaltic might eventually join a larger airline group like Lufthansa, but on Monday he emphasized that such a move is not expected within the next five years.

Industry executives, analysts, and investors have noted that further consolidation in the European airline sector is necessary for its success, as smaller national carriers continue to face challenges.

Gauss highlighted airBaltic’s unique wet lease business model, which involves leasing aircraft to other airlines temporarily to fill capacity gaps. He believes this positions the airline advantageously ahead of its IPO, especially as global jet shortages and delivery delays continue to affect the industry. The IPO is scheduled to take place either in the second half of this year or early 2025 on Nasdaq Riga.

Gauss pointed out that events like the machinists' strike at Boeing, which could exacerbate delivery delays, might further benefit airBaltic’s business.

Last week, Lufthansa extended its wet lease partnership with airBaltic until beyond summer 2025. Gauss also revealed that airBaltic is in talks with potential clients for wet leases in Saudi Arabia, India, and central Africa.

He refrained from specifying the exact timing of the IPO, noting, "There is a general belief that around the (U.S.) election date, it may not be an ideal time to approach the markets." Additionally, he mentioned that if airline stocks continue to underperform, airBaltic’s IPO might be delayed further.

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Source: Reuters‍