airBaltic enters Chapter 11 restructuring amid financial challenges

Latvian airline airBaltic has begun financial restructuring under the United States Chapter 11 procedure. To support liquidity and operations during this process, lenders including Barclays, Morgan Stanley, and Strategic Value Partners have committed up to 350 million euros in new financing. An initial 140 million euros has been received, with approximately 78.9 million euros earmarked for the redemption of eight aircraft and seven engines.

Lithuanian Transport Minister Juras Taminskas stated that while an airBaltic bankruptcy would cause short-term discomfort and disrupt air traffic between Lithuania and Riga, it would not be a tragedy for Lithuania. He noted that Riga Airport functions as a central hub specifically because of airBaltic, and its absence would immediately impact regional connectivity. Taminskas suggested that Lithuania should promote flights from Kaunas and Palanga airports to diversify its market, which is currently dominated by Ryanair (44%), Wizz Air (22%), and airBaltic (17%).

In Latvia, the airline is considered economically significant, contributing approximately 2% to the national GDP. Consequently, the Latvian government is expected to take all necessary steps to prevent a total bankruptcy.