airBaltic faces liquidity risk as soaring fuel prices threaten European airlines

Rising jet fuel costs, which now account for up to 30% of airline operating expenses, are putting intense pressure on smaller European carriers. airBaltic, the Latvian airline, needs fresh financing to meet a €30 million state loan and to replenish a reserve required for a €380 million bond that matures in 2029. Rating agency Fitch warned that the airline’s capital structure is under strain and that credit risk is increasing.

IATA chief Willie Walsh has warned that the broader fuel‑price surge could trigger bankruptcies, consolidations or forced takeovers across the sector. Lufthansa, which recently expanded its regional network, is being watched for possible involvement in a rescue or acquisition of airBaltic as the latter’s liquidity tightens.