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Bertolt Flick: Quality in every detail!

By Inese Timuka . 02.02.2010

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An interview with President and CEO of airBaltic Bertolt Flick.

airBaltic is Latvia’s very own national carrier as well as a source of national pride. From being a small company that operated just a handful of flights back in 2000, it has since grown to offer as many as 70 direct routes from Riga and Vilnius in 2010. airBaltic’s president and CEO, Bertolt Flick, was also recently elected chairman of the board of the Riga Tourism Development Bureau, which actively promotes Riga abroad with  the brand LIVE Riga.

We have heard a lot about the new achievements of airBaltic over the last year.
Yes, there have been so many activities during 2009. The current economic situation in the Baltic countries is very tough. With the record fall in GDP in Latvia, unemployment has risen strongly, meaning that personal expenses have dropped. If in previous years 45 percent of our passengers were from Latvia, then in autumn 2009 the share was between 10 and 12 percent. Nevertheless, we are working to establish better and better connections for our passengers. We have been able to increase our transit passengers strongly, which I believe is a considerable achievement in 2009.
We have opened many connections this year – Tartu, Kaunas, Turku, Lappeenranta and Dushanbe are just a few. We finished 2008 with losses, linked to fuel prices and other factors, but now I say that 2009 has been the most successful year for airBaltic ever, and taking into consideration the current economic conditions in our country that’s a great result.

How does the number of airBaltic passengers in business class changed?
Passengers in business class are similar to last year, but development in this area is not as steep as we would like.

How difficult is it for a Baltic airline to compete in the destinations and markets to the east?

At the moment we have four destinations in Russia and the market is developing positively. But the eastern market is very much managed from above, and before we can apply for flight rights we need to agree on prices, capacity and routes, so we can’t act as freely in the Russian market as much as we would like.  The popularity of the Internet and online sales are growing in this region as well.

What led you to the decision to restart business in Vilnius?

There are 4 million passengers in Riga annually, but Tallinn and Vilnius have only around 3 million combined. Even with 4 million passengers, Riga is still small airport. In the last few years there has been a significant fall in the Lithuanian market, of around 45 percent, and we were forced to close a lot of flights from Vilnius. Also Vilnius was more expensive than the airport in Riga and there were restrictions and an overall poor situation in the market.
All this time we were negotiating with Lithuanian government on how to improve the market conditions, and since a new tariff was implemented at Vilnius airport in November 2009 we agreed to open five new routes. However, that doesn't mean that flights from Riga are any less now than they were.

Recently airBaltic won the rights to provide flights for the Finnish and German governments. What was the key winning strategy in these cases?
It’s hard to say. For example, with Finland the success factor was the stability of the provision of our company’s flights, and indeed the price, as always. For us it is both economically favorable and very pleasant that foreign governments choose our company.

airBaltic won the prestigious Gold Award as Airline of the Year  2009-2010. Can you tell us more about this award?

This award tells the story of how successfully we could re-orientate the company in a short period to a transit airliner. These are fundamental changes in our company work and strategies.

airBaltic has introduced something else that’s new to the market – the possibility to buy package deals.
Yes, that’s another new service for our clients, easy-to-purchase packages. While choosing a flight you can also book one of 23,000 hotels around the world, and the price for the hotel will be around 20 percent cheaper than standard travel agencies can offer or you can find online yourself.
Already now we can see that day-by-day the number of clients buying these packages is growing and the product is developing quickly. The product is sold not only in the Baltic states but in Scandinavia and Germany too.

Where did this idea come from?
The product is not widespread; just one more airline in Europe has such a service. In the US, just two or three companies offer such a service. So basically it is a relatively new product in the whole market. We had the idea a long time ago, but it takes time to implement, to find the technical solutions, active searches for partners. I think that 23,000 hotels is an impressive number to choose from.
We see great potential in the product and can see that some travel agencies have started to use this service too. We can offer much better prices than they have.

Can you tell us more about the new pan-Baltic loyalty program BalticMiles? What are the benefits compared to the earlier EuroBonus program?

It’s totally different. The previous program was a classical travel bonus points program, where passengers collected bonus points using flight services, renting cars and staying at hotels, using the accumulated points for those same services.
But Baltic Miles is totally different. You can collect points not only by flying but also for mobile phone conversations, going to the cinema, doing your shopping, etc. With every purchase points are accumulated and at the same time you can exchange these points for flight tickets and for goods in different shops, spa centers, at hotels. So this program is much wider.

And together with your partners you established a new taxi company, Baltic Taxi.
The reason why we founded a taxi company was not because we forecast great business potential in this area but because we were desperate that neither the government nor the municipality were taking steps against fraud being committed against tourists. So we established a company that guarantees quality. So far we can see that local passengers are prevailing, also justifying the LIVE Riga slogan – good for Rigans, good for tourists.
It’s interesting that the fares for all taxis are fixed by the municipality, but I have noticed, and I don’t know why, that when I take a taxi other than Baltic Taxi the prices are always higher – no matter which company, it’s more expensive.

Is airBaltic already feeling the impact of LIVE Riga’s activities on the number of passengers?
It is a strong and attractive brand and I believe it will be successful. I have put big hopes on the year 2010 – the number of passengers using airBaltic will grow strongly. I think that the tourism industry in Latvia is out of date because there haven’t been targeted governmental policies on how to stimulate it. In Latvia we have seen the steepest fall in the tourism sector in Europe. The reason – nothing has been done. By comparison, in Estonia 15 percent of GDP is from the tourism industry, while in Latvia the number is just 7 percent.
But now an absolutely new era has started in the Latvian tourism sector. To speak in images, LIVE Riga is an ice breaker; this is the first ever Latvian tourism brand in history.
Most of the companies in the tourism sector will work united with LIVE Riga; we will reconcile all our activities and our plans. It is also important that our functions don’t duplicate each other and that we can work together. New, more active politics and promotion will bring good results. Riga is a great city with great potential for tourism. It’s a city full of contrasts! Old and new, Art Nouveau and modern architecture; there’s plenty to see and do.

Which countries are the target audiences?

Russia, neighboring Estonia and Lithuania, Sweden, Finland, Norway, Germany, Belarus, Ukraine, Poland and the United Kingdom.

What are the criteria to join LIVE Riga?
Quality! All of our partners will meet quality criteria and standards. We have a LIVE Riga advisory board that brings together tourism professionals as well as the municipal police, the purpose being to get various reports and expertise. It will be difficult to renew Riga’s image as it has been ruined over the last few years. I believe that for 99 percent of tourists who have been to Riga there haven’t been any problems, but unfortunately those who suffered share that information. And that’s what ruins Riga’s reputation.

Which industries are represented by companies that have joined LIVE Riga so far?
We see interest from various companies in all spheres. Let’s mention, for example, everything from companies organizing exhibitions to clinics interested in medical tourists. It’s important to understand that LIVE Riga is a platform for people to share information. We gather up information, wrap it nicely, and pass it on to the audience.


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