newstodate.aero
Nov 07, 2013 (newstodate): An long drawn-out "air war" is still being fought between the now-bankrupt Lithuanian carrier flyLAL and Latvia's airBaltic.
In October 2008, flyLAL opened a court case claiming that airBaltic was being indirectly subsidized by the Latvian state in the form of preferential treatment at Latvia's Riga Airport, enabling the Latvian carrier to build up a dominating role in the Baltic region.
According to flyLAL, the state-owned Riga Airport subsidized airBaltic by discounting its airport charges by 80 percent, allowing the carrier to bolster its competitive power in the Lithuanian market to bring down flyLAL.
The issue was brought to head-on conflict as a Lithuanian regional court froze some of airBaltic's property prior to the court battle to secure a Lithuanian hold on the assets.
-We are not talking about air rates and low-fare traffic. We are talking about what we consider unfair competition, and we have repeatedly approached both airBaltic and the Latvian Minister of Transportation to discuss the issues, Gediminas Ziemelis, then chairman of flyLAL Group Board said, reported by newstodate in October 2008.
-As we have had no response to these approaches, we have calculated our accumulated losses from this unfair competitive situation, and taken the claim to court in an effort to secure our position in an eventual lawsuit, said Mr Ziemelis.
Not unexpectedly, the allegations were refuted by airBaltic and the Latvian state claiming that the Latvian carrier did not enjoy preferential treatment compared to other carriers at Riga Airport.
Mr Ziemelis is now, together with other executives then serving with the flyLAL Group, being investigated by Lithuania's Prosecutor General after a raid to verify allegations that its top management illegally emptied the company for assets prior to the eventual grounding.
Expected to draw out for a further one or two years before a verdict can be reached, the court case is being handled at Latvia's Supreme Court, and a pre-judical decision has been requested from European level courts.
In October 2008, flyLAL opened a court case claiming that airBaltic was being indirectly subsidized by the Latvian state in the form of preferential treatment at Latvia's Riga Airport, enabling the Latvian carrier to build up a dominating role in the Baltic region.
According to flyLAL, the state-owned Riga Airport subsidized airBaltic by discounting its airport charges by 80 percent, allowing the carrier to bolster its competitive power in the Lithuanian market to bring down flyLAL.
The issue was brought to head-on conflict as a Lithuanian regional court froze some of airBaltic's property prior to the court battle to secure a Lithuanian hold on the assets.
-We are not talking about air rates and low-fare traffic. We are talking about what we consider unfair competition, and we have repeatedly approached both airBaltic and the Latvian Minister of Transportation to discuss the issues, Gediminas Ziemelis, then chairman of flyLAL Group Board said, reported by newstodate in October 2008.
-As we have had no response to these approaches, we have calculated our accumulated losses from this unfair competitive situation, and taken the claim to court in an effort to secure our position in an eventual lawsuit, said Mr Ziemelis.
Not unexpectedly, the allegations were refuted by airBaltic and the Latvian state claiming that the Latvian carrier did not enjoy preferential treatment compared to other carriers at Riga Airport.
Mr Ziemelis is now, together with other executives then serving with the flyLAL Group, being investigated by Lithuania's Prosecutor General after a raid to verify allegations that its top management illegally emptied the company for assets prior to the eventual grounding.
Expected to draw out for a further one or two years before a verdict can be reached, the court case is being handled at Latvia's Supreme Court, and a pre-judical decision has been requested from European level courts.