Latvia offers stake in airBaltic to Estonia, matching terms offered to Lufthansa

It has been reported that the Estonian government will begin discussions on a proposal from Latvia’s Ministry of Transport to acquire a financial stake in the airline airBaltic. The talks, due to begin on July 3, 2025, have been arranged following the June 30, 2025, announcement by the Bundeskartellamt, the German competition authority, that it had cleared  Deutsche Lufthansa AG (Lufthansa Group) to acquire up to a  10% minority stake in Latvian-based carrier airBaltic for a quoted price €14 million.   

Both Estonia and its neighbor, Lithuania, are expected to buy into airBaltic under the same conditions as the Lufthansa Group, although the exact details have not been disclosed about the exact size and costs of any share transactions that might be agreed to following the meeting. According to the Estonian media outlet ERR.ee, Latvia’s Ministry of Transport has confirmed that both Estonia and Lithuania have received a formal offer to acquire a stake in airBaltic.

Lithuanian officials have previously stated that any agreement that might be made for the state to take a stake in airBaltic would require a firm commitment from airBaltic and its current shareholders that it would open a fixed base at Vilnius Airport (VNO) and expand flight operations from the airport, which it currently serves in any event.

Markus Eigenheer / Wikimedia CommonsThe Latvian government is reported to have discussed involving neighboring countries during a closed session with Estonian officials. It was also decided that airBaltic would abandon plans to expand into foreign markets and instead focus on profitability and the development of Riga Airport (RIX), said ERR.ee.

“Lufthansa has decided to invest €14 million and become a strategic partner. We’re offering Estonia and Lithuania the same terms and are awaiting their response. The next opportunity would be to join through the IPO. We’ve made it clear that airBaltic must bring in private capital,” said Latvian Minister of Transport Atis Švinka. Previously, while Estonian leaders have in the past offered airBaltic political support,  financial backing in terms of a stakeholding has so far not been addressed by the parties.

“That’s what we’ll be discussing [on July 3, 2025], in the government,“ said Latvia’s Prime Minister Kristen Michal during an interview. “My view of airBaltic is positive. It is a very solid company from Estonia’s perspective. But the full proposal from the Latvians will be presented to the government tomorrow. We’ll explain in more detail at the press conference what we discussed and where we stand,” he added.

More about the Lufthansa deal

Lufthansa Group’s minority stake of 10% comes with additional rights for the company to take part in airBaltic’s decision-making process, said a Bundeskartellamt statement. Such a concession is likely to be sought by any other party looking to buy into the carrier. In 2024, airBaltic and Lufthansa agreed on substantially expanding their wet-lease cooperation, where Lufthansa leases aircraft together with their crew from airBaltic. This alignment is thought to have helped secure the proposed purchase of the minority stake, given the two carriers’ close alignment that already exists.

Michael Derrer Fuchs / ShutterstockThe Lufthansa Group merger project with airBaltic was subject to German merger control, rather than European merger control, added the Bundeskartellamt. However, as Lufthansa is not expected to acquire significant control of airBaltic, with a 10% stake falling short of this threshold, the European Commission competition authorities would not need to become involved, as it was when Lufthansa Group purchased ITA Airways of Italy.

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