Latvia routes

What airBaltic will do with bi​g fleet of Airbus 220s?

History of airBaltic for last 10 years has ups and downs. After major expansion of Riga hub in 2008-2010, company entered period of huge losses: they lost 52M EUR in 2010 and 121M EUR in 2011. Turnaround started in 2012, when the airline reduced losses to 27M and achieved small black numbers every year after, since 2013. 

At that time, airBaltic operated fleet of Boeing 737 Classics and Bombardier Q400 (which replaced old Fokker 50s). For short period of time, they also had two Boeing 757s. Back in 2012, they started moves towards Airbus 220 (as Bombardiers CS300 at that time).

Let’s look at the history of this development.

In July 2012, airBaltic announced order of Bombardier CS300: 10 firm orders and 10 options. This order supposed to replace their ageing Boeing 737s.

In the middle of 2014, airBaltic exercised 3 out of 10 options and firm order grew to 13. 

In December 2016, first Bombardier CS300 started commercial service in airBaltic fleet.

I had a chance to be on first demo flight from Vilnius on this CS300. 

airBaltic started to look for options for their Q400 turboprops renewal. I expected, they may go for bigger jet aircraft to replace them, but it came as surprise for me, they announced huge order of 30+30 additional CS300 (30 firm orders + 30 options). CS program was acquired by Airbus and rebranded to A220. 

As of end of 2018, airBaltic has 14 CS300 operating in their fleet. 

So, as of now, airBaltic has 50 total firm orders of A220-300 and 30 options. As of today, airBaltic still operates 9 Boeing 737 (mix of -300 and -500) and 12 Q400. 

All firm orders will come in next 5 years and will be used for replacement of 737 and Q400. Growth of 15 tails in 5 years is organic growth for an airline which is now growing not only from Riga but also from Tallinn

But there are two questions for me:

  • what airBaltic will do with 30 additional options if excercised?
  • is CS300 good replacement for regional flights?

airBaltic executives said for media they are looking for different business options. Possibly growth of charter operations. I do believe, it is good option to have options, especially when company is looking for investor. There are still talks Latvian state may privatise airBaltic soon.

New owner may have changes in business strategy, so if new strategy involves more growth, it is beneficial for airline to have possible order on hand. 

Transfer traffic is still important for airBaltic. Company says, A220 is such good aircraft it can fly from Riga to Abu Dhabi and Riga to Tallinn as next rotation. But, most of regional flights are now operating on 76 seats Q400 and offers high frequency. Replacement with 145-seater A220-300 is a huge increase in capacity. I do believe, high frequency (4-5x daily) flights from Riga to Helsinki, Tallinn, Vilnius, Moscow plays important role of success of Riga hub. Q400s also let airBaltic operate daily or even double daily flights to such destinations as Palanga, Turku, Tampere which enhances competitiveness of airBaltic. Will they be able to operate CS300 between Riga and Palanga profitably and offer enough frequencies to support convenient connections via Riga? 

Good capacity fit and high frequency is important for transfer traffic. For example, route from Riga to Kaunas was cut, when airBaltic replaced all Fokker 50s to Q400. Route was too thin to support larger aircraft. Now – aircraft will be replaced with almost double number of seats so more routes may become victims of this replacement. I do believe it is huge challenge for airBaltic network planning ahead. 

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