The Government Grants Support to Riga International Airport
The government has decided to support State Joint Stock Company “Riga International Airport” in the conditions of the emergency situation with the total amount of EUR 54.42 million, increasing the company's share capital and cancelling the dividend payment for the previous year.
The company's share capital will be increased by EUR 49.91 million, and the amount of dividends for 2019, which will remain at the Airport's disposal, accounts for EUR 4.51 million. These steps will promote the Airport's ability to overcome the crisis caused by the Covid-19 virus and stabilize the operations of the largest international aviation company in the Baltics.
“Riga Airport is the main traffic hub in the region, which ensures Latvia's international accessibility; it manages infrastructure that is strategically important for national security”, Tālis Linkaits, the Minister of Transport, comments the government's decision. “I am convinced that once the state of emergency is lifted, convenient connections in the Baltic region and Europe will be necessary for both our entrepreneurs and residents. Currently, it is important to ensure the operation of the Airport in the conditions of reduced demand, while maintaining the core of aviation professionals who work at the Airport for the benefit of us all,” the Minister emphasizes.
In 2019, Riga Airport showed the historically best financial results with the number of passengers reaching 7.8 million. The government's decision to suspend international passenger traffic has had a direct impact on the Airport's operations, suspending its economic activity almost completely. As compared to the corresponding period of 2019, the number of passengers served at the Airport dropped by 99.9% in the first half of April.
Given that the magnitude of the impact of the Covid-19 crisis is still unknown, the Airport Board has modelled various economic recovery scenarios and developed a clear cost-cutting action plan that includes both total operating costs, including staff costs, and costs of infrastructure development projects.
The increase of the share capital will allow the Airport to operate efficiently during the period of emergency and to continue its most important investment projects.