Latvian airline airBaltic said on Monday that it had voluntarily filed for protection under Chapter 11 of the U.S. Bankruptcy Code, seeking to reduce its accumulated debt and continue operating amid rising operating costs, fuel prices and travel disruptions linked to the war with Iran.
The company said flights, ticket sales and customer services would continue as normal during the restructuring. Chapter 11 allows companies to continue operating while reorganizing their debt under court supervision, and does not mean that operations will stop immediately after protection is sought.
Losses and liquidity pressures
airBaltic carried 5.2 million passengers in 2025 and generated about 779.3 million euros in revenue, while reporting a net loss of 44.3 million euros. The company employs more than 3,000 people.
Financial pressures intensified in March, when the company warned of liquidity pressures caused by a sharp rise in oil prices after failing to hedge adequately to cover its jet fuel needs. The protection filing came after Spirit Airlines collapsed in May, making airBaltic the second airline whose difficulties have been linked to the fallout from the war.
The company had proposed raising up to 257 million euros through the issuance of new super-priority debt, which would have delayed the rights of existing bondholders. The proposal raised concerns about credit risk and pushed up the yield on 380 million euros of bonds maturing in 2029.
The Latvian government provided the company with a 30 million euro loan in April, but declined to commit to further support amid restrictions linked to European Union state-aid rules and political considerations limiting additional government funding. The government owns 88.37% of airBaltic, compared with about 10% held by Germany’s Lufthansa.
airBaltic secured a 350 million euro financing commitment from a group of lenders in the form of debtor-in-possession financing during the bankruptcy proceedings, subject to approval by the competent court.
Fleet cuts and suspension of Dubai flights
The company operates an all-Airbus A220-300 fleet comprising 54 aircraft, while also leasing aircraft and crews to other airlines during parts of the year. It began operations with Saab turboprop aircraft.
In August, the company announced plans to reduce its fleet to 36 aircraft by the end of 2026 and then to about 40 aircraft by 2031, compared with an earlier plan to reach 100 aircraft.
airBaltic is the largest airline in the Baltic states, operating scheduled passenger flights to more than 70 destinations in Europe and elsewhere. It relies on Riga Airport as its main hub linking Northern and Eastern Europe with the rest of the continent, as well as destinations in North Africa and the Middle East. In March, it suspended direct flights to Dubai until October because of the fallout from the war.
Three decades of regional expansion
airBaltic was founded in Riga in August 1995 as a joint venture between the Latvian government and Scandinavian airline SAS, which at the time held 28.5% of the company, compared with 51% for the government, following the collapse of former national carrier Latavio. SAS sold its stake in 2009.
The company strengthened its regional presence by opening an operations hub in Vilnius, Lithuania, in 2004, before developing additional bases in Tallinn, Estonia, and several European cities.
