I don’t know what the Latvian government is thinking, but this seems like a bad move…
In this post:
airBaltic CEO Martin Gauss exiting airline
It has just been revealed that the CEO of airBaltic, Martin Gauss, will be leaving the carrier. Specifically, the Latvian national carrier’s shareholder meeting has just been held, and the company’s biggest shareholder is the Latvian government.
The Ministry of Transport of the Republic of Latvia has expressed a vote of no confidence in Gauss, so he’ll be leaving the airline effective immediately (April 7, 2025). Here’s what Latvia’s Minister of Transport, Atis Švinka, had to say:
“It is important for me to see results. airBaltic is a company of national importance, and it must be able to independently develop and adapt to external conditions.”
Here’s what airBaltic’s Chairman, Andrejs Martinovs, had to say:
“On behalf of the airBaltic Council and team, we would like to express our gratitude to Martin Gauss for his leadership, dedication and vision since 2011. For more than a decade, Martin Gauss led the company through significant changes and growth, creating a strong foundation for the airline’s future.”
“At the same time, confidence is maintained in the airBaltic board and professional team, which ensures the company’s daily operations, passenger transportation and operational management. The core business objectives have not changed and airBaltic continues to work on implementing its strategy and moving towards a potential IPO.”
Gauss has had quite the impressive career. The German started his career as a pilot, and from 1992 to 1995 was a 737 pilot at British Airways subsidiary Deutsche BA. He then worked his way up at the airline, until 2006, when the airline was sold to airberlin.
Gauss has continued to be a type rated pilot while leading airBaltic. When the airline flew 737s, he was rated on that, and ever since the airline transitioned to the A220, he has been rated on that.
Gauss has been an incredibly competent leader
If you ask me, Gauss has done an impressive job as CEO of airBaltic:
- He has transitioned the airline to being an all Airbus A220-300 operator, for one of the most efficient and streamlined fleets out there
- He has grown the airline massively, which is ultimately important for connectivity to and from Latvia
- The current situation with Russia has been a huge challenge for airBaltic, given that much of the carrier’s service was previously to the country; so Gauss got creative, with airBaltic’s wet lease agreements, which help the airline minimize losses
I can’t think of many niche airline CEOs that I think more highly of than Gauss. I suppose the government is disappointed that airBaltic went from an €8.3 million profit in 2023, to a €118.2 million loss in 2024, especially as the government is hoping for an IPO soon.
At the same time, that loss included a €73 million non-cash charge related to A220 Pratt & Whitney engine issues, as well as foreign currency fluctuations. Obviously that loss isn’t great, but it has been a challenging time for the airline.
It’ll be interesting to see who airBaltic selects as Gauss’ permanent replacement. I have a really hard time imagining that the person will be more competent than Gauss.
Gauss is only 56, so I hope another airline snatches him up soon, as he’d be a huge asset, and is a great big picture strategist. Typically when airlines fire CEOs, I think to myself “what took so long?” In this case, I’m wondering “what were they thinking?”
Bottom line
airBaltic CEO Martin Gauss has been fired, after the government expressed a vote of no confidence in him at the company’s shareholder meeting. Gauss has been leading the airline since 2011, and if you ask me, he has done a commendable job leading the airline through a challenging time.
I get that the government of Latvia wants the airline to be profitable, though they should also be realistic, given current conditions. Congrats to Gauss on 14 years leading the airline, and I’m curious to see what’s next for him.
What do you make of Gauss being fired at airBaltic? Do any OMAAT readers have a different take on his leadership?
Huh? To me, Airbaltic completely screwed up their reputation within this year.
- Flight to Copenhagen - rescheduled two times, until cancelled. Had to rebook with SAS for +180EUR more (initial difference was +60EUR)
- Flight to Paris - rescheduled three times. Lost booked train tickets (90EUR lost)
- Flight from London got delayed, had a connection in Riga. No comms, nothing while flying (remember the same with finnair and SAS -...
Huh? To me, Airbaltic completely screwed up their reputation within this year.
- Flight to Copenhagen - rescheduled two times, until cancelled. Had to rebook with SAS for +180EUR more (initial difference was +60EUR)
- Flight to Paris - rescheduled three times. Lost booked train tickets (90EUR lost)
- Flight from London got delayed, had a connection in Riga. No comms, nothing while flying (remember the same with finnair and SAS - everything extremely well managed). Run up to the waiting connecting flight, cannot find where to put my luggage - crew just standing and looking (airplane was already sitting 40mins on the tarmac, waiting for us) signalling to the crew - instead of helping me I hear "What seems to be the problem, sir". Well with this kind of attitude...
At least for a couple of years I'm done with Airbaltic crap. For holidays Ryanair/Wizzair is fine for me. For business travels SAS perfectly suits my needs, and I am willing to overpay to have this peace of mind and happy crew and all smiles.
Looks like Lufthansa is getting their hard work done for them...
He lost all credibility when he partnered with the fascist Starlink. A disgraceful and tone deaf decision given Latvia's geography.
My gut feeling is that besides the 118m loss, known a month ago, the preliminary financials for Q1 were very bad and would have harmed the IPO plan even without market crash. BT has struggled with cash liquidity for a couple of years and some news from Latvian media hint that Gauss may have gone to the govt again to request 150m in order to keep the airline alive. There appears a condition that if...
My gut feeling is that besides the 118m loss, known a month ago, the preliminary financials for Q1 were very bad and would have harmed the IPO plan even without market crash. BT has struggled with cash liquidity for a couple of years and some news from Latvian media hint that Gauss may have gone to the govt again to request 150m in order to keep the airline alive. There appears a condition that if cash drops below 25m (year-end was 32m), the company must pay back 380m bonds plus probably penalties and interests. Latvia has supported the grande project throughout Gauss time: ca 100m in 2012, 80m in 2017, 340m in 2021, 50m in 2024.
While I agree with some of the points made in the article, I think Ben is being way too generous to Gauss here. Air Baltic committed to an insane number of new aircraft with no exact idea of where & how to deploy them, which directly led to them becoming a semi-ACMI provider in effect. They also put all their eggs in the single-type basket of a brand new and as yet untested model. When...
While I agree with some of the points made in the article, I think Ben is being way too generous to Gauss here. Air Baltic committed to an insane number of new aircraft with no exact idea of where & how to deploy them, which directly led to them becoming a semi-ACMI provider in effect. They also put all their eggs in the single-type basket of a brand new and as yet untested model. When the chickens came home to roost with the Pratt & Whitney engine issues and the closure of the Russian airspace (a perennial possibility when you're based in Baltic states), their strategy simply fell apart and they became a walking stick for LH Group operations. Selling 10% of the company for a measly €14M and losing more than €100M in 2024 alone (a huge amount for any carrier, let alone one owned by the government of a small country such as Latvia) was probably the final nail in the coffin. Gauss flew way too close to the Sun.
Just because a govt (the major shareholder) can fire a CEO doesn't mean it should. We all know know what happened to SriLankan Airlines after the highly successful expat CEO got booted by the govt: profitability disappeared for good, Emirates pulled support, aircraft safety and maintenance became problematic, routes shrank, service quality diminished, pax volume went backwards. SriLankan has not recovered in the 16 years since.
I wouldn't really compare Latvian government to Sri Lankan government, lol. I'm pretty sure they know what they're doing and why they're doing it.
Earth to Samo, Earth to Samo...politicians are the same all over the world, lol(?). I''m pretty sure your touching faith in politicians is misplaced. Do you trust them because they're white and Srilankans are brown?
Part of me wishes that Lufthansa fires Spohr and replaces him with Gauss, but that's about as likely as an asteroid wiping us out.
If this were Africa, we’d have had a detailed exposé from @Sean M. on exactly why there was a fallout. I’m hoping he can pitch in with informative tibits some other time!
Any expat CEO of a state owned airline that loses $100m is gonna be on the hot seat.
Is bait-and-switch illegal in Europe Because that's what AirBaltic does.
I'm trying to book a fare that shows as €80, but then doubles when actually trying to pay for it.
Getting into bed with Elon’s Star-Link for onboard Wi-Fi against the wish of the government would also not have gone down very well.
I don't think it's as simple as this. Sure, he's overseen the introduction of lots of nice new planes, but that isn't really a good metric to judge a CEO if it hasn't really translated into any kind of significant or long-term productivity.
I've seen in other places that the reasons for this firing are two-fold:
1) Lufthansa's purchasing of a 10% stake in AirBaltic for only €14m is seen as hugely undervaluing...
I don't think it's as simple as this. Sure, he's overseen the introduction of lots of nice new planes, but that isn't really a good metric to judge a CEO if it hasn't really translated into any kind of significant or long-term productivity.
I've seen in other places that the reasons for this firing are two-fold:
1) Lufthansa's purchasing of a 10% stake in AirBaltic for only €14m is seen as hugely undervaluing the company... I can't imagine the fact that Gauss is German really helps with the optics of that either.
2) Gauss committed to sending up to 21 A220s to Lufthansa Group this summer, in addition to other wet lease ops. This is almost half the fleet and is entirely disproportionate from the business lost due to the Russian airspace closure. AirBaltic can't run its full schedule in the Baltics with all of these wet-leases so it has to wet-lease planes of its own in turn - generally A320s from Smartlynx/Avion Express which are of far lower quality and reliability than the A220s. Effectively, tax-payer money is going to funding A220s for Lufthansa to lease when citizens of Latvia never really get to see these.
That's meant to read "profitability" not productivity...
Yeah exactly. Coming up with a cohesive strategy that is understandable to outsiders is one thing. Doing a successful job of not only driving results across the business (and executing the strategy effectively) but also managing stakeholders (the board) successfully is another.
Then you have the flip side - some CEO's are incredibly good at managing their board stakeholders despite poor performance. This appears to be the case at American.
This is not the typical way to de-Gauss.
Basically got fired for the reason that the Latvian government is unhappy that BT is flying LHG/SK wet leases, whilst they have to wet lease other aircraft to cover their own flights.
They are unable to understand that this is happening due to the P&W issues.
AA could use a competent leader.
AA replacing their B737s with A220s would be an upgrade.
How do you trade off a mainline fir a regional jet? And the planes that AA needs to get rid of are their sad America the A319s and A320s. Their 737s are fine.
The BCS3/A223 is hardly a regional jet, it’s got longer range and higher MTOW then the A319
Any chance the Latvian government wants to do the same to the AA board…pretty please?