Lufthansa Group Secures 10% Stake in airBaltic: Boosting European Presence

Lufthansa Group has marked another strategic move in its expansion efforts by acquiring a 10% stake in Latvian flag carrier airBaltic. The deal, which was revealed on Wednesday, January 29, 2025, solidifies the intention the Lufthansa Group expressed back in October 2024 to hold a minority share in the Latvian airline. This acquisition follows closely on the heels of Lufthansa Group's recent takeover of ITA Airways in Italy, underscoring the company's commitment to growing its footprint in the European aviation landscape.

The €14 million ($14.6 million) investment in airBaltic, formalized through an agreement between the Latvian Ministry of Transport and Lufthansa Group, not only grants Lufthansa a minority stake in the airline but also secures a seat on airBaltic's Supervisory Board. Initially structured as a 10% convertible share, Lufthansa's investment can be converted into ordinary shares upon airBaltic's future Initial Public Offering (IPO). The precise stake Lufthansa will hold will be pegged to market dynamics around the potential IPO, ensuring the German airline group retains no less than a 5% share in airBaltic.

Though the IPO's timing has seen some fluctuations, with mentions of a possible delay until early 2026, the transaction with Lufthansa Group is expected to conclude in the second quarter of 2025, pending clearance from EU competition authorities. Lufthansa Group has articulated that this investment builds upon their existing partnership with airBaltic, with a focus on enhancing network quality and expanding into new markets, all while addressing customer needs through advanced product development.

This agreement further cements the collaborative bond between Lufthansa Group and airBaltic, exemplified by the extension of their wet-lease agreement for an additional three years past summer 2025. The partnership facilitates the deployment of up to five of airBaltic's Airbus A220-300 fleet during the winter of 2024/25 and up to 21 aircraft come summer 2025 across Lufthansa Group hubs, ensuring flexible and robust service offerings to meet customer demand.

airBaltic, Latvia's foremost airline headquartered in Riga, recently welcomed its 50th Airbus A220 aircraft adorned in a special livery, symbolizing a significant milestone in its fleet expansion. The longstanding collaboration between Lufthansa Group and airBaltic, spanning since 2019, underscores the mutual trust and value derived from this partnership.