April 19 (Bloomberg) -- AirBaltic AS, Latvia’s state-owned airline, narrowed losses more than forecast last year after cutting costs and a better-than-expected Christmas season, said Chief Executive Officer Martin Gauss.
AirBaltic yesterday said its net loss had narrowed to 19 million lati ($35.5 million) last year from 85 million lati in 2011 as it cut routes and revenue remained little changed. That compared with a company forecast for a 38 million lati loss.
“The main reason is cost savings, our fleet is much smaller and we achieved the same revenue by flying less,” Gauss said in an interview in his Riga office. First-quarter results are “much better than planned” and may be released in May, he said. The company targets a loss of 16 million lati for this year.
AirBaltic, which is the subject of a European Commission probe over state aid since November, is planning on upgrading its fleet, replacing Boeing Co.’s 737s with Bombadier Inc’s CSeries starting at the end of 2015 to reduce fuel expenses.
The Latvian airline has planned for 10 CSeries aircraft, and expects to use a majority of its options for more, the CEO said.
“If we could change the Boeing fleet with the CSeries today with the current fuel prices, the difference in operational cost would be $30 million just by changing aircraft,” he said.
The Latvian government hasn’t found an investor for the airline since it invited expressions of interest in August.
“I think what’s holding up the investor is that you in general don’t want to invest heavily in European airlines” now, said Gauss.
The state owns 99.8 percent of the company’s stock.
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