Latvia seeks strategic investor to rescue state-owned airline airBaltic

The Latvian government is negotiating with a strategic investor to address airBaltic’s severe financing shortfall, which could require up to €150 million by year‑end. The carrier, which received a €30 million state loan in April, must repay that loan in August and faces risk of default on other obligations.

Prime Minister Evika Siliņa said talks are ongoing but no agreement has been reached. A key condition for any investor is that airBaltic’s main hub remain at Riga Airport, preserving the airline’s role in connecting Latvia to European markets. German carrier Lufthansa already holds a minority stake. The airline plans to meet bondholders on 3 August to seek short‑term financing, while a new business plan is expected next week.

AirBaltic’s financial strain has led Fitch Ratings to downgrade the airline to CCC‑, and repeated delays in its IPO have pushed the target to early 2026. The outcome of the investor search will determine whether the airline stays afloat, remains under state backing, or moves toward partial privatisation.