Baltic airlines locked in legal battle

Other News Materials 1 October 2008 20:02 (UTC +04:00)

Rival airlines airBaltic and FlyLAL- Lithuanian Airlines are prepared to take their dispute over alleged unfair competition all the way to the European Commission, the chairmen of both companies told Deutsch Presse-Agentur dpa on Wednesday.

The spat began on September 30 when media reports from Lithuania said local airline FlyLAL had obtained a Lithuanian court order freezing airBaltic's fixed assets in Latvia, including its headquarters at Riga airport.

FlyLAL claimed the volume discount of 80 per cent airBaltic receives at its home airport in Riga constitutes unfair competition and is seeking 200 million litas (58 million euros) in damages.

Confusion grew when Latvian Transport Minister Ainars Slesers said airBaltic would withdraw its operations from Vilnius airport in response, followed by a denial from airBaltic chairman and chief executive Bertolt Flick that any such action was planned.

Speaking to dpa on October 1, Flick condemned FlyLAL's actions and said they were without legal foundation. He said airBaltic had yet to receive any official documentation from the Lithuanian court.

"According to EU law, a temporary injunction in another country without hearing the other side is not possible, so this decision as such cannot be enforced," he said.

"It is quite a legal surprise that a lower-level court judge in one country would arrest another country's international airport. This is a ludicrous claim."

Flick added that there is nothing illegal in the discount scheme operated by Riga airport, from which other airlines including Ryanair, EasyJet and KLM also benefit.

"There is also the same thing in Kaunas airport in Lithuania and to make matters really absurd, Vilnius airport also offers volume discounts," Flick claimed.

"FlyLAL is the recipient of volume discounts at their own airport, but they seem to think being a recipient of a volume discount at Riga airport is something different. This is going a bit far.

"One has to say the intention of FlyLAL might not be to get damages but simply to damage our reputation. They have damaged their own reputation and even more they have damaged the reputation of Lithuania.

"What kind of investment environment is Lithuania if a company can go to a court and impound the international airport of another country?" Flick asked.

Riga airport was functioning normally today with no disruption caused to passengers.

Speaking from Vilnius, Gediminas Ziemelis, whose ZIA Valda company is the largest shareholder in FlyLAL-Lithuanian Airlines, told dpa the legal moves taken by the company were justified.

"Our main intention is to cover our losses which came from unfair competition with Riga airport," he said.

"We are just using European competition law and have been advised on this by consultants based in London."

Ziemelis also affirmed his willingness to take the dispute all the way to the European courts.