AirBaltic Files Chapter 11 Bankruptcy for Restructuring
Latvian airline AirBaltic files for U.S. Chapter 11 bankruptcy protection, secures €350M in new funding, and expects restructuring to last until June 2027.
Stock photo for illustration only, not from the actual event
- Latvia's AirBaltic filed for Chapter 11 bankruptcy protection in a U.S. court.
- Flights, tickets, reservations, and customer service continue operating normally.
- The airline secured a €350 million ($404m) financing commitment for restructuring.
- The restructuring process is expected to run until around June 2027.
Latvian flag carrier AirBaltic has officially filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York. The move provides the financially pressed airline with court-ordered protection from creditors while it works through a comprehensive debt restructuring plan.
Despite the legal filing, airline executives emphasized that passengers will experience no immediate disruptions. All scheduled flights, ticket sales, reservations, and customer service operations will proceed as normal. Management and supervisory boards will also remain in place as the restructuring unfolds through approximately June 2027.
Stock photo for illustration only, not from the actual event
To support ongoing operations during this transition, AirBaltic has successfully secured a commitment for €350 million (approximately $404 million) in new financing. This crucial injection is designed to stabilize the company's liquidity while it addresses mounting financial hurdles.
The filing follows a severe financial downturn driven by weak liquidity following an April state loan, rising fuel costs linked to Middle East tensions, lingering fallout from the pandemic and the war in Ukraine, and ongoing engine troubles. These combined pressures culminated in a €70 million net loss during the first quarter of 2026, forcing the carrier to abandon its repeatedly delayed IPO plans.
Utilizing U.S. Chapter 11 bankruptcy protection for a European airline highlights a strategic approach to global debt restructuring, offering a temporary shield against international creditor lawsuits while preserving core operations. This is particularly vital for maintaining the carrier's Riga hub connectivity across the Baltic states.
The restructuring carries significant weight beyond Latvia, given AirBaltic's pivotal role as a primary connectivity hub linking the three Baltic states via Riga. The carrier is 89% owned by the Latvian government, with Lufthansa Group holding a 10% stake, and operates a fleet of 55 Airbus A220-300 aircraft, representing the world's largest single-type A220 fleet.
Source: Skift
Found something wrong in this article? Report an issue with this article
Comments
Leave a Comment