airBaltic Struggles With Engine Problems

airBaltic reported a loss of some 90 million euros for the first half of 2024, which has sparked some concern about the airline’s performance.

When reporting the financial results, airBaltic knew the figures would raise concerns about its long-term viability. However, the hysteria described by its CEO was unwarranted.

airBaltic is said to be facing considerable Pratt & Whitney engine shortages, which are affecting its ability to operate an optimal schedule.

Furthermore, the shortage has caused and rather accelerated depreciation costs by engines that are forced to undergo shop visits ahead of schedule.

The shop visits are directly related to the powdered metal issue, a hot topic of conversation across the industry that affects airBaltic and many other global airlines.

airBaltic added that it also experienced a colossal amount of one-time costs during the first half of the year, which prevented it from thriving financially.

Despite these comments regarding the financial performance in the first half of the year, outsiders quickly questioned the company strongly.

Speaking with EER, aviation expert Toomas Peterson said that AirBaltic’s business model is not the right one.

It’s a business model that requires a significant amount of investment and a hope of becoming profitable, something which cannot be confirmed.

Interestingly, however, the hope of airBaltic rests on the case that Lativa needs this company and without it, air travel to and from this region wouldn’t be possible. This argument is felt in neighbouring countries, but Peterson argues it isn’t enough.

Peterson stated that based on a loan from the market at 14.5% interest, the business is “just a pyramid scheme in financial terms, and at some point, it just has to collapse.”

These comments, however, have received pushback from others who have stated that their outlandish nature is aimed solely at creating hysteria and, where possible, attempting to lower the company’s value.

Furthermore, according to those close to the company, the comments do not reflect the airline’s current status and internal difficulties, from engines to one-time costs.