It's a shame the airline business is so dependent on scale. If it wasn't, we might have more airlines like Air Baltic. Despite being passenger-friendly and innovative, Air Baltic probably can't survive long-term as an independent entity.
More than six years ago, Air Baltic, a small government-owned Latvian airline, brought in Boeing and Airbus for a spirited competition between two next-generation aircraft — the Boeing 737 Max 7 and Airbus A319neo.
Just before Air Baltic was set to choose Airbus, a Bombardier sales team popped in. “We have something,” one person told Air Baltic CEO Martin Gauss, and it wasn’t the regional jets Bombardier usually pitched small European airlines.
“We said, ‘no, no, no,’ we are going for real airplanes,” Gauss told me last month. “They came and said, ‘We have a real airplane coming.’ We opened the process again. They pitched. They showed the aircraft. They gave the price. They gave the performance guarantee. And based on that package, we had to take a decision.”
Air Baltic committed to an airplane — then called the Bombardier CS300, and now the Airbus A220 — few other airlines wanted, and it almost certainly got a great deal. Now, it has a dozen, all with 145 seats, with firm orders for 38 more, plus 30 options.
I spent some time with Gauss last month in London and found him honest and engaging. He seems to enjoy leading one of Europe’s airline success stories, but he is realistic about Air Baltic’s future. Small airlines can’t leverage advantages of scale, and Gauss knows Air Baltic might be attractive to a major European airline company or private equity firm. Whatever entity acquires the airline will be probably thrilled to have a fleet of efficient and comfortable narrow-body jets.
If you read my story about Air Baltic, let me know what you think via Twitter or email.
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Skift Senior Aviation Business Editor Brian Sumers [email@example.com] curates the Skift Airline Innovation Report. Skift emails the newsletter every Wednesday. Have a story idea? Or a juicy news tip? Want to share a memo? Send him an email or tweet him.
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Photo credit: Air Baltic was close to going with the Airbus A319neo before Bombardier made it a sweet deal for what was then the CS300. Now it's called the Airbus A220-300 — the aircraft pictured here — and it's been a game-changer for the airline's fleet. Air Baltic