airBaltic’s Restructuring from Red to Green – Airways | Airlines

DALLAS — In recent weeks, airBaltic (BT) posted profit along with its highest-ever H1 revenue in its history, and the carrier is in the process of launching its IPO. “I’m focusing on taking the airline to the stock exchange,” states Martin Gauss, CEO of airBaltic.

Back in 2011, the airline was in a very different state, in terms of value provided, fleet, and, most importantly, finances. It was struggling, and restructuring at the earliest was imperative. Martin Gauss took over as the CEO of airBaltic in 2011 and worked with shareholders on a new restructuring program called “ReShape”, which aimed at taking the company to profitability.

Airways‘ Siddharth Ganesh meets with Martin Gauss in an exchange about project ‘ReShape’ and what it took to turn an airline from the red to the green.

SG: You joined airBaltic in 2011 during its financially troubling time. ‘Reshape’ was the structuring plan brought to bring the airline back to profitability. What were your first thoughts and how did you want to proceed on joining BT?

MG: When I came in I didn’t have the complete picture of what had happened and found out in the first weeks. I came up with a strategy how to fix the issue after four weeks and presented it to the cabinet. We had a suggestion to shrink the airline and bring it back to profits rather than shutting it down completely. We hired consults to help bring about ReShape and we used that to restructure.

Personally, what I realized when I just came was that too many tickets were sold at too low prices and the costs were not covered. This was going on for years and it was too much. Too many cheap tickets out there.

“Reshape was a very detailed document of hundreds of pages that covered several areas of the airline like revenue management, distribution, and ground ops. Etc. it was built to transform the airline.“

Martin Gauss, airBaltic CEO

So it was too many cheap tickets and not external…

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