Latvia seeks strategic investor to rescue airBaltic amid bankruptcy threat

The Latvian government is in talks with a strategic investor to inject capital into the national carrier airBaltic, which is facing severe liquidity strain. Prime Minister Andris Kulbergs told Reuters, “We are talking with a serious partner, yes, I can disclose that,” but did not name the investor or the amount. The deal is expected to be finalized this summer to prevent a default on the airline’s €30 million government loan due in August 2026 and to address a missed €21 million funding of its bond reserve account.

AirBaltic’s financial position has deteriorated after a €380 million senior secured note issue and rising costs from fuel, labor and maintenance. Fitch warned that the missed bond‑account payment raises the probability of default, and the European Commission could investigate the loan as illegal state aid if it is not repaid.

Estonia, which does not hold a stake in airBaltic, warns that a collapse would sever its direct flights to key hubs such as Brussels, Amsterdam and Paris, and is developing a contingency plan to maintain connectivity for its passengers.