In the latest episode of the podcast Virziens, host Armands Broks talks with Martin Gauss, ex-CEO of airBaltic. They discuss the reasons behind M. Gauss’s firing, the conditions necessary for IPO, and the business results of airBaltic. Also, he shares some mistakes he made in his time leading the airline.
One reason publicly mentioned for M. Gauss’s dismissal is the airline’s poor financial results. “If taking the CEO out is the move to rescue the company, then that’s not a smart move in my view. But I’m biased because I’m the CEO,” states M. Gauss. It’s not uncommon for leaders to leave and then return, and M. Gauss is ready to come back to execute the IPO.
A. Broks also asks about the possibility of a management buyout.”Yes, I would love to. I wanted to do this for all these years,” shares M. Gauss.
Currently, M. Gauss believes that the wisest approach is to continue preparing for the IPO. While the IPO cannot happen right now due to the situation in the financial markets, when the time comes, the company will need a management team that investors trust to grow the business. “If not, then you end up in an M&A transaction where the state needs to find another buyer,” warns M. Gauss.
The intention behind the IPO is also to strengthen the local stock market. “It would have been the largest IPO in the Baltic States by far, because the public would have become shareholder of the company,” he adds.
Although airBaltic has been operating for 30 years, many people do not understand the company’s impact on the local economy and the consequences if airBaltic stops to develop. “Just go to Ljubljana and see what happened there. AdriaAirways disappeared. That’s it – no connectivity. Yes, they have a little bit of Ryanair, they have a little bit of Lufthansa, but that’s it,” says M. Gauss.
What will happen if airBaltic is no longer strong? M. Gauss warns that if low-cost airlines become more powerful, there will be strong seasonality – more passengers in summer but significantly fewer in winter, and the aviation center may shift from Latvia to Lithuania.
Currently, airBaltic’s fleet consists of 50 aircraft. M. Gauss remains optimistic that reaching 2 billion in revenue by 2030 with 100 planes is possible.