airBaltic files for Chapter 11 financial restructuring while flights continue

Latvian flag carrier airBaltic has voluntarily initiated proceedings under Chapter 11 of the U.S. Bankruptcy Code to restructure its financial obligations, while stressing that flights and customer services will continue as normal.

According to a press release issued by the airline, airBaltic and certain subsidiaries filed for Chapter 11 protection with the U.S. Bankruptcy Court for the Southern District of New York. The process is intended to provide the airline with protection from creditor claims while it restructures its debt and other obligations, including agreements with aircraft lessors. airBaltic said all flights are operating as scheduled, while tickets, reservations, refunds, vouchers and customer credits remain valid and will continue to be handled under existing policies.

To support its operations during the restructuring, airBaltic has secured a commitment for €350 million in debtor-in-possession (DIP) financing arranged by Strategic Value Partners, with Barclays, Hayfin Capital Management, Morgan Stanley, Oaktree Capital Management and Strategic Value Partners participating as lenders. The financing carries an interest rate of SOFR plus 8%, or approximately 12%, and remains subject to approval by the U.S. Bankruptcy Court. Together with cash generated from operations, airBaltic expects the financing to provide sufficient liquidity throughout the Chapter 11 process.

airBaltic Chairman of the Supervisory Board Andrejs Martinovs said the objective is to emerge from the process with a financially stronger airline and a “substantially reduced level of obligations” that can be sustainably managed over the long term. CEO Erno Hildén added that the airline will continue flying, selling tickets and planning its future schedule while implementing measures aimed at making the company more efficient and financially sustainable.

The airline expects the Chapter 11 process to be completed by approximately June 2027. The existing Management Board and Supervisory Board will remain in place, while airBaltic said it will continue to meet its obligations to suppliers, service providers and other partners in the normal course of business.

airBaltic is majority-owned by the Latvian state, which holds 88.37% of voting rights. Deutsche Lufthansa AG holds a 10% stake, while the remaining 1.63% is owned by private shareholders. The airline operates an all-Airbus A220-300 fleet and is based in Riga.