The Corruption Prevention Bureau (KNAB) has initiated an investigation into airBaltic CEO Martin Gauss to assess his compliance with the Law On Prevention of Conflict of Interest in Activities of Public Officials. The probe follows allegations from private individuals concerning a potential conflict of interest, according to KNAB representatives.
The controversy centers on claims made by Girts Lapins of the National Alliance, who alleged on social media that Gauss is the owner of the German company MaGau GmbH, which holds shares in 2e systems GmbH, a supplier to airBaltic. However, airBaltic clarified that 2e systems has been a business partner since 2006, four years before Gauss became CEO.
Gauss declared his connection to 2e systems upon assuming his role at airBaltic, noting his ownership of a 100% stake in MaGau GmbH, which owns a minor 1.25% stake in 2e systems. To prevent conflicts of interest, Gauss has refrained from any decision-making involving 2e systems, ensuring transparency and compliance with regulations, the airline stated.
Amid public scrutiny and media discussions, airBaltic proactively contacted KNAB to provide full disclosure and evidence of compliance with corporate governance standards. The airline emphasized its adherence to Latvian laws, highlighting that its contract with 2e systems is maintained with strict transparency.
Despite these measures, the investigation comes at a critical time for airBaltic. The airline faces challenges, including the recent announcement of 4,670 flight cancellations for the summer 2025 season due to delays in engine maintenance by Pratt & Whitney. The cancellations have sparked discussions within the Latvian government regarding airBaltic’s management and future direction.
Prime Minister Evika Silina emphasized the national importance of airBaltic and expressed confidence in the upcoming shareholders’ meeting on January 21 to evaluate the airline’s management performance. Transport Minister Kaspars Briskens underscored the strategic importance of airBaltic to Latvia’s economy, stressing the need for management to secure EUR 300 million for the airline’s business plan.
In the backdrop of these developments, airBaltic is also preparing for a significant financial restructuring and an Initial Public Offering (IPO). The government approved a reduction in airBaltic’s share capital, reallocating EUR 571.293 million to offset past losses. This move is aimed at simplifying the share structure in preparation for the IPO, potentially involving a minority stake sale to a strategic investor, with Lufthansa rumored to be a potential partner.
As the investigation unfolds, airBaltic’s management, led by CEO Martin Gauss, remains under intense scrutiny. The outcomes of the KNAB probe and the shareholders’ meeting will be pivotal in determining the airline’s leadership and strategic path forward.