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Corporate governance of Air Baltic Corporation AS

Air Baltic Corporation AS (airBaltic) is duly incorporated joint stock company under the laws of the Republic of Latvia on 8 February 1995. Its primary shareholder is the Latvian state, which holds 80.05% of the stock, while Ralf-Dieter Montag-Girmes holds around 20% through his fully-owned Aircraft Leasing 1 SIA. 

Shareholders

Shareholders exercise their rights to participate in airBaltic’s management at the Shareholders Meeting. Resolutions at the Shareholders Meeting are adopted by a majority of votes present and entitled to vote. There are certain exceptions to a simple majority, in which case not less than the three fourths majority vote of Shareholders is required. Such exceptions are: amendments to Articles of Association; increase or decrease of the share capital; issuing and conversion of the Company’s financial instruments; reorganisation; termination or continuation of the Company’s activity; and conclusion, amendment or termination of a group of companies agreement, or inclusion therein.

It is at the sole discretion of the Shareholders Meeting to elect and recall the Supervisory Board members of the Company. Resolution regarding the Supervisory Board members is adopted by a simple majority vote.

Supervisory Board

The Supervisory Board of airBaltic consists of three members. The Supervisory Board members are elected for the period of three years. Resolutions during the Supervisory Board meetings are adopted by a simple majority vote. The Supervisory Board members elect one Chairman and one Deputy Chairman from among themselves.

The Supervisory Board elects the Executive Board and appoints the Chairman of the Executive Board. The Supervisory Board supervises the work of Executive Board, but meanwhile both bodies have close and understanding working relationship in the best interests of airBaltic.

The Supervisory Board meetings take place regularly and during the meetings, but also in-between the meetings, the Supervisory Board members are informed on all significant business matters, including, but not limited to latest business developments, operational and financial planning of airBaltic and monthly financial reports.

Executive Board

The Executive Board manages Company’s everyday business and defines its future strategies, and regularly reports to the Supervisory Board. The Executive Board of airBaltic is comprised of three members, who are elected for the period of three years. The Executive Board members manage and represent the Company jointly. During the Executive Board meetings the resolutions are adopted by a simple majority vote.

The Executive Board is required to obtain a prior approval from the Supervisory Board in deciding on a number of issues. Some of those are: establishment of a subsidiary, direct or indirect acquisition or reduction of holdings in other companies; change of airBaltic’s base airport or headquarters; transactions not characteristic to the commercial activity of the Company; entering into transactions, the value of which exceeds EUR 1,000,000 (one million euros) within the framework of one financial year; transactions related to the aircraft acquisition, disposal, lease agreements; transactions related to commercial pledges, Company’s guarantees or financial guarantees, and hiring an external auditor.

The Executive Board has introduced Top Management Meetings, which are comprised of the Company’s main operational directors, in order to provide the Executive Board with the necessary information and recommendations required to make thorough business decisions that promote short and long term profitability of airBaltic.

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