Lithuanian Airlines start their operations
flyLAL, also referred to as Lithuanian Airlines or LAL, served as Lithuania’s national airline. It provided both domestic and international scheduled services, handling passenger transportation and cargo. The airline’s primary hub was Vilnius International Airport, with a secondary base at Palanga International Airport.
This was Lithuania’s second attempt to establish a national airline. The first, Lietuvos Avialinijos (Lithuanian Airlines), was founded in 1938. After Lithuania gained independence from the Soviet Union, the airline was re-established as the government-owned Lithuanian Airlines on September 20, 1991.
However, due to financial challenges, operations were suspended on January 17, 2009. Discover the full story, including details about Lithuanian Airlines’ services, fleet, operations, and the crisis that led to its downfall.
Its services and fleet
In its early days, the airline operated with aircraft from the Aeroflot fleet located in Vilnius, which included twelve Yakovlev Yak-42s, seven Tupolev Tu-134s, four Antonov An-24s, and three Antonov An-26 airliners.
Between 1991 and 1993, the airline shifted its focus from routes within the former Soviet Union to destinations in Western Europe. By late 1991, international flights from Vilnius to Copenhagen had commenced, followed by routes to Moscow, London, Paris, Stockholm, Amsterdam, and Frankfurt in 1992–1993. Flights from Kaunas to Prague, Budapest, and other cities were also introduced. However, from the start, the airline faced strong competition from Lufthansa and Scandinavian Airlines.
In December 1991, Lithuanian Airlines sub-leased its first Boeing 737-200 from Malév Hungarian Airlines, becoming the first airline in the former Soviet Union to operate Western-built Boeing aircraft.
Their frequent flyer program was called Gintarinės mylios (Amber Miles).
Going international and privatization by the government
On March 8, 1993, “Lietuvos Avialinijos” joined IATA, ensuring international recognition of the airline. The company gained the right to sell tickets for global airlines and had its flight schedules included in global flight information computer networks.
After a decade of financial losses, failed attempts to launch transatlantic flights, and a controversial sale of landing slots at London Heathrow to reduce around 20 million dollars in debt, Lithuanian Airlines was privatized in 2005. The airline was sold to LAL Investicijų Valdymas (LAL Investment Management), a fully-owned subsidiary of the FlyLal Group, for 27 million Lithuanian litas (equivalent to 7.8 million euros today).
The airline was subsequently renamed flyLAL–Lithuanian Airlines. In 2006, the company’s operations were reorganized by business areas, and the “flyLAL Group Services" group of companies (now AB “Avia Solutions Group") was established, consisting of the following companies:
- AB “FlyLAL – Lithuanian Airlines” – operations ceased in 2009;
- UAB “FL Technics” – specializing in aircraft maintenance, repair and overhaul;
- UAB “BPC Travel” – a travel agency;
- UAB “BAA Training Aviation Academy” – global aviation training center;
- UAB “Avia Asset Management” – providing long-term aircraft leasing and management services;
- Previously UAB “FlyLAL Charters”, now UAB “Small Planet Airlines” – leisure airline, operations ceased in 2018.
In February 2007, flyLAL was honored as the most punctual airline at London’s Gatwick Airport. The company had 542 employees. By December 2007, its fleet included three Boeing 737-300s, five Boeing 737-500s, and four SAAB 2000 aircraft, with plans for further expansion. That year, the airline served 526,000 passengers.
In 2008, flyLAL carried 847,000 passengers. That same year, charter flight services were transferred to its sister company, FlyLAL Charters, leaving flyLAL to focus exclusively on scheduled flights. The airline offered passengers connections from Vilnius to over 600 cities worldwide through its codeshare partners.
FlyLAL Fleet
- Boeing 737-200 (3 units): LY-GPA, LY-BSG, LY-BSD;
- Boeing 737-300 (7 units): LY-BAG, LY-AGP, LY-FLB, LY-AQV, LY-AQU, LY-AQX, ES-LBC;
- Boeing 737-500 (10 units): LY-BFV, LY-AZW, LY-AZY, LY-AGZ, LY-AGQ, LY-AZX, LY-AWD, LY-AWE, LY-AWF, LY-AWG, ;
- Boeing 757-200 (2 units): LY-FLG, LY-FLA
- SAAB 340 (2 units): LY-SBA, LY-SBB;
- SAAB 2000 (7 units): LY-SBC Suvalkietis, LY-SBD Dzūkas, LY-SBY, LY-SBK, LY-SBQ, LY-SBW, LY-SBG;
- Yak-42 (12 units) – operated until 2002;
- Tupolev Tu-134 (8 units) – operated until 1998;
- Antonov An-24 (4 units) – operated until 1996;
- Antonov An-26 (3 units) – operated until 1996.
- Lockheed JetStar 731 (1 unit, government used, registration number LY-AMB).
The end of Lithuanian Airlines
In December 2008, flyLAL temporarily suspended operations due to worsening financial difficulties. The airline faced significant challenges that year, including a price war with airBaltic and a slowdown in the travel industry caused by the Great Recession. Despite these problems, flyLAL saw a 61% increase in passenger numbers in 2008.
However, the company reported debts totaling 86 million litas (nearly 25 million euros now) and publicly acknowledged its financial struggles. It proposed selling 51% of its shares to the Lithuanian government for a symbolic 1 litas in exchange for a state guarantee of its debt, but the government declined the offer.
Soon after, FlyLal announced it would sell 100% of its shares to SCH Swiss Capital Holdings for 1 million dollars, effective January 23, 2009. The new owners promised to provide 1 million euros to help pay off some of the debts and keep the airline’s operating license. However, when the money was not received, the deal was canceled, and FlyLal officially stopped its operations on January 17, 2009. A second offer for a government bailout was rejected on January 23, 2009.
The bankruptcy of FlyLal greatly reduced the number of direct flights from Vilnius, cutting the destinations from 28 to 14. As a result, the number of passengers at Vilnius Airport dropped by 43%. At the time of the bankruptcy announcement, 29,400 customers still had tickets with the airline.