New York, Sept. 15 – Latvia’s airBaltic filed for Chapter 11 bankruptcy protection in New York to restructure mounting obligations as Iran war jet fuel costs doubled and triggered the worst aviation crisis since the pandemic. The Latvian flag carrier cited acute financial stress from geopolitical and market shocks after creditor talks stalled. AirBaltic’s Chapter 11 bankruptcy proceedings allow the airline to keep flying while it renegotiates debt under court supervision and targets completion by June 2027.
The carrier secured a commitment for €350 million in debtor-in-possession financing from Strategic Value Partners, Barclays, Hayfin Capital Management, Morgan Stanley and Oaktree Capital Management at about 12 percent interest, subject to court approval. Flights, ticket sales and customer service will continue without interruption during the court-supervised process. Management aims for €44 million in annual profit improvement through stakeholder negotiations on sustainable terms.
AirBaltic reported about $583 million in funded debt and finance lease liabilities plus €106 million in payroll and airline taxes, against 2025 revenue of roughly €779 million. It plans to cancel or defer a $3.5 billion Airbus order for 40 additional A220 aircraft and $106.7 million in Pratt & Whitney engines while shrinking wet-lease operations and adjusting its more than 3,000-strong workforce. The Latvian government holds the majority stake, and Lufthansa owns 10 percent.
The filing followed bondholder rejection of a prior €257 million super-senior debt plan and an earlier €30 million state loan that proved insufficient. AirBaltic is the second airline casualty linked to the conflict after Spirit Airlines. Chapter 11 bankruptcy protection gives the Baltic carrier court tools to resize its fleet toward domestic and regional demand of about 30 aircraft rather than earlier expansion goals.