AirBaltic is close to securing a major financial lifeline as it works to weather higher costs and an increasingly unstable European air travel market.
The Latvian flag carrier said Thursday that it reached agreements with current bondholders and third-party financiers for up to €257 million, or about $298.5 million, in interim financing. The money is expected to be raised through the issuance of new bonds, which would mature on Feb. 26, 2027.
AirBaltic’s bondholders and investors must sign off on the deal before it can take effect. They will consider the proposal at a meeting on Sept. 11, officials said.
If the agreement is approved next week, about €180 million would become available shortly after. Another €77 million would be made available once additional conditions have been met.
“The proposed financing gives us a clear path to secure the liquidity airBaltic needs for the next phase of its development,” CEO Erno Hildén said in a news release. “Our revised business plan requires us to take decisive steps to strengthen the company’s financial position and build a more efficient and self-sufficient airline… This financing would give us the necessary time and resources to put those measures into action, while continuing to operate flights and serve passengers as planned.”
The carrier announced last month that it would adopt a new business plan and shrink its fleet of Airbus A220s, which it previously expected to expand. It cited moderating revenue growth, uncertainty and high costs stemming from conflicts in Ukraine and the Middle East, and constraints on Pratt & Whitney engine deliveries.
At the time, the airline said it would seek about €225 million in interim financing.
