CEO Interview: What’s Next for airBaltic?

FARNBOROUGH - At the Farnborough Airshow, we caught up with airBaltic’s (BT) Chief Executive Officer, Martin Gauss, to discuss how the carrier molded to the Airbus A220-300 and the airline’s next steps.

Since acquiring its first A220-300 in 2016, the carrier has gone from being a small, regional airline to a powerful European airline.

The airline currently operates a fleet of 36 aircraft, all of which are A220-300s. The new A220s replaced older Boeing 737 and Bombardier DHC-8-400 aircraft, providing a far enhanced passenger experience.

Now, the airline is carefully considering its next steps as it aims to further stretch its wings throughout Europe and beyond.

According to Gauss, the Airbus A321XLR and flights to North America are being considered, both of which would be substantial developments for the airline.

Interview with Martin Gauss

AW: Tell us about how airBaltic decided to order the A220-300, and how the aircraft has shaped your airline since then.

MG: Exactly 10 years ago at the Farnborough Airshow, we signed an LOI (Letter of Intent) for, at that time CS300, now the A220-300, and today you are standing on number 36 of that initial order. 

The aircraft has been in service with us since 2016, and we became the launch operator of the A220-300 we have another four coming this year, and eight coming next year. These are firm orders, and we have another 30 options. 

It has changed our airline. Today, we are an all-A220-300 operator, we fly routes that are very short, like a 30-minute sector, but also up to seven hours from Dubai. We fly 100 routes with the same aircraft, the same concept in a 2-class configuration. 

We have a full-service European business class and an ultra-low-cost economy cabin, and it works very well. 

It worked before COVID, in COVID of course we had the same issues that all airlines had, but we are coming out of COVID, and the concept in which airBaltic flies with this aircraft being the greenest, most environmentally friendly aircraft in its category helps us. 

The passengers are looking for ‘what is modern, what is new’, and that is the newest you can fly. We’re very happy, and Airbus asked us to bring the aircraft to the airshow to show it. 

We’ve flown more than 8 million passengers on the A220-300, and overall the aircraft has seen over 60 million passengers. It’s established, very much liked by the flying public, and for us, it's very economic to operate.

AW: airBaltic has a dedicated business class and economy product. Do you envision ever having something in the middle, like a premium economy product?

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MG: We have a premium economy product if you look at how we sell tickets because of what comes with the ticket. 

We’ve flown more than 8 million passengers on the A220-300, and overall the aircraft has seen over 60 million passengers. It’s established, very much liked by the flying public, and for us it's very economic to operate.

Martin Gauss

We have different ticket categories, and the seating on the aircraft is the same but if you go to other aircraft where you have a different pitch in the premium economy product, then we have the same pitch and space as others have on long-haul aircraft for premium economy.

We have basically, being a low-cost carrier in the back of the cabin, a premium economy product. 

AW: What do you think about a possible A220-500 series aircraft?

MG: That is something where we always say ‘if it is available, we will evaluate it’, but we are happy with the A220-300 version, so currently we are not interested to change. 

If we would go for another aircraft type, it would be something that could fly long-range, which would be an A321XLR or a small widebody. This aircraft is the one we want to fly.

AW: You mentioned a small widebody. Do you imagine what that could be?

MG: We are looking at the moment at what that could be. The A321XLR is the obvious aircraft you would want to use to fly these longer distances, especially to North America, because that is a market from the Baltics that is underserved. 

There is no direct, long-haul flight out of the Baltics today, and therefore we are reevaluating and with that, we are looking at what type of aircraft suites such a route. Only when that is positive and we have the financing for it, then we would be starting it. 

We are evaluating all smaller narrowbodies together with the A321XLR because that is the only one that has the range we would need. 

We are looking at the economics compared to the A321XLR, which doesn’t have the cargo capacity you may want to have, while you have an A330-800, which then is a widebody. 

The A321XLR is the obvious aircraft you would want to use to fly these longer distances, especially to North America, because that is a market from the Baltics that is underserved. 

Martin Gauss

Of course, [the A330-800 has] a lot more seats, so what we are doing now is evaluating with all the numbers we gather from the different manufacturers and economics, what it would mean for us, is there a passenger base, what is the passenger base, and that is something that is happening now. We are far from making a decision at this point. 

AW: If you do acquire an A321XLR and you fly it to North America or much longer routes, do you imagine having a more dedicated business class like a lie-flat seat? 

MG: That aircraft would come with a lie-flat bed/seat. That is already something we have put into this evaluation. 

AW: Do you know what kind of seat the business class would be?

MG: We are always looking; the airshow is always good to see other products. We would see something more like what jetBlue has, so we would still keep our concept and we wouldn’t be going super luxury, but we would have a lie-flat bed on these longer flights. 

AW: Will the business class cabin be in a 1-1 configuration?

MG: It depends on whether you have a wide-body or narrowbody, then we will evaluate. We are looking at what is in the market, then we will put the numbers together, then run the business case and see if there is a case for it. If not, we just won’t do it, and that’s how we approach everything. 

Ten years ago, we took a smart decision, a very smart one, on ordering this (the A220-300) and it has paid off very well, and now we are evaluating what our next step will be, and that could be a good next step, taking a look at the changes to the world. 

We are now at the Eastern border of the world, and lots of NATO soldiers are based in the Baltics and lots of traffic going to North America, so that’s what we are looking at.

AW: Finally, how would you evaluate how the summer market is going so far?

MG: Above our expectations from the passenger demand, cost also. Unfortunately, there has been a major disruption at European airports which we see, but very satisfied with the booking performance of the summer. 

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Featured Image: Kochan Kleps/Airways