President says that Lithuania does not necessarily need flagship airline

“Lithuania made two attempts to create a flagship carrier but wasn’t too successful. Those efforts always ended with debts and resale of assets to various interest groups. Unfortunately, that experience wasn’t successful. We have missed the right time to enter the international aviation market and nobody has come up with a model which would at least help avoid losses, let alone get some profit. Hence I don’t think that the government or the state should be forced into loss-making business for the third time since the costs of that will have to be borne by all Lithuanian people,” she told reporters in Vilnius on Tuesday.

Air Lituanica was a risky undertaking, she said, adding that it was clear from the very beginning that the airline would not be profitable.

“Air Lituanica is a municipal company, which always needed subsidies to survive. I’d say that the model chosen for this business was a risky undertaking. It was absolutely clear that such a company won’t be able to generate a profit… It was clear that it was a reckless scheme, which is collapsing now, just as many other reckless schemes initiated by former mayor [of Vilnius Artūras Zuokas] did,” Grybauskaitė said.

Financially-troubled Air Lituanica, which was established several of years ago to make the Lithuanian capital more accessible via air travel, suspended operations last Friday.

Air Lituanica is the second Lithuanian air carrier to cease operations. Now-bankrupt privately-owned flyLAL-Lithuanian Airlines grounded all flights early in 2009 due to financial troubles.