January 23, 2009 / 10:47 AM / 10 years ago

RPT-Indebted Lithuanian airline files for bankruptcy

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VILNIUS, Jan 23 (Reuters) - Lithuanian carrier flyLAL, which was privatized in 2005 and counts Scandinavian airline SAS (SAS.ST) among its competitors, said on Friday it had filed for bankruptcy.

The indebted airline grounded its flights last weekend after failing to attract an investor.

“Being unable to continue flights and without seeing any real chances to renew operations, we were forced to file for bankruptcy,” CEO Vytautas Kaikaris said in a statement.

He added that the firm’s financial situation “worsened significantly at the end of 2008 and beginning of 2009 and there were no possibilities to improve it without additional investments”.

The company said its had 89 million litas ($33.41 million) of debt at the end of 2008.

Vilnius airport has started negotiations with a number of airlines to fill the gap left by the former national carrier.

“There are negotiations going on with six airlines, and some of them could start flights from Vilnius for sure,” said airport spokesman Arunas Marcinkevicius.

A group of businessmen privatized Lithuanian Airlines for 25.6 million litas in 2005, restructuring it into a number of companies. FlyLAL’s owners are to continue a charter firm.

The government rejected a proposal to buy flyLAL back for a symbolic 1 litas and cover its debts. The plan to sell its shares to a Swiss-registered investment fund also failed. (Reporting by Nerijus Adomaitis; Editing by Jon Loades-Carter)

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