Latvian flag carrier airBaltic filed for Chapter 11 bankruptcy protection in the U.S. on Monday as it weathers higher jet fuel prices and route disruptions in Eastern Europe and the Middle East.
The airline said it voluntarily initiated bankruptcy proceedings in the U.S. Bankruptcy Court for the Southern District of New York. The filing will not affect flight operations, officials said, and passengers will not see any disruptions.
AirBaltic signaled earlier this summer that it was facing serious financial headwinds when it canceled plans to expand its Airbus A220 fleet, adopted a new business plan, and made arrangements for new interim financing. It blamed higher fuel prices, changing demand patterns, and route disruptions stemming from the conflicts in Ukraine and the Gulf region.
AirBaltic also disclosed Monday that it has secured a commitment for €350 million, or about $403.6 million, in new debtor-in-possession financing arranged by the investment firm Strategic Value Partners and funded by Barclays, Hayfin Capital Management, Morgan Stanley, Oaktree Capital Management, and Strategic Value Partners.
The airline said it will seek the court’s permission to access this funding, which should be enough to support continued operations during the bankruptcy process.
“Our focus is on continuing to run the airline while implementing the changes set out in our new business plan,” Erno Hildén, president and CEO of airBaltic, said in a news release. “For our passengers, our operations continue as normal – the process does not affect their travel experience and is not noticeable to them – we are flying, selling tickets, and planning our future schedule, with the same focus on safety and operational reliability. At the same time, we are taking the necessary steps to make airBaltic a more efficient and financially sustainable airline.”
AirBaltic said it expects to complete the Chapter 11 process by June 2027.
The carrier is majority owned by the Latvian government, with Lufthansa Group holding a 10% stake.
