Latvian carrier airBaltic is stepping up efforts to reduce costs and improve the profitability of its network, cutting routes and frequencies not only from Lithuania but elsewhere in its European network. The measures come as the airline faces high fuel costs, substantial debt and a continuing need for additional financing.
The latest changes affect airBaltic’s operations from all three Lithuanian airports. According to Lithuanian public broadcaster LRT, the carrier is reducing its planned programme as it reassesses routes on the basis of demand and profitability.
The Lithuanian cuts are, however, part of a wider effort by airBaltic to bring capacity more closely into line with its financial position.
Earlier this year, the airline had already begun selectively cancelling flights from its main Riga base. In April, airBaltic confirmed that around 5% of its Riga schedule for May was being “adjusted“, mainly because sharply higher aviation fuel prices had made some individual flights uneconomic.
The airline said at the time that routes and schedules were being reviewed on a daily basis, using forecasts of passenger demand and operating costs. Flights that failed to meet the required economic criteria could therefore be removed from the schedule.
The exercise has subsequently extended beyond individual flights to the structure of the network itself, with airBaltic concentrating available capacity on routes expected to generate stronger returns.
Another significant measure came at the end of June, when airBaltic prematurely returned two Airbus A220-300s to one of its lessors by mutual agreement.
The move reduced the carrier’s operational fleet to 54 aircraft, while no further aircraft deliveries are planned during the remainder of 2026.
AirBaltic spokesman Augusts Zilberts said the decision followed a review of fleet and capacity requirements taking into account macroeconomic conditions, fuel-price volatility, geopolitical uncertainty, changes in demand in individual markets and the profitability of particular routes.
The airline nevertheless said the return of the two aircraft would not prevent it from operating its planned network.
The decision is significant because airBaltic had previously pursued an ambitious expansion strategy centred on the Airbus A220-300 and envisaged a fleet approaching 100 aircraft in the longer term. That expansion strategy is now being reassessed as part of a new business plan.
At the same time, airBaltic continues to generate revenue by operating aircraft for other European carriers under ACMI – aircraft, crew, maintenance and insurance – agreements.
During the 2026 summer season, as many as 25 airBaltic aircraft are operating in the networks of partner airlines, particularly Lufthansa Group carriers including Lufthansa, SWISS, Austrian Airlines and Brussels Airlines, as well as Air Serbia.
This provides airBaltic with an alternative source of revenue without requiring the airline itself to assume the full commercial risk of selling seats on those flights. During the coming winter season, around six aircraft are currently expected to remain deployed with partner airlines.
The strategy therefore appears increasingly focused on balancing airBaltic’s own scheduled network with potentially more predictable income from wet-lease operations.
Network rationalisation has been visible for several months.
In May, airBaltic cancelled its planned summer Vilnius-Krakow operation. The airline said the route was no longer commercially viable because of rising fuel prices. The service had originally been introduced for the 2024 summer season.
The airline’s financial pressure means that marginal routes – particularly those with relatively weak yields, strong competition or high operating costs – are increasingly vulnerable.
At the same time, airBaltic is not pursuing an across-the-board contraction. It continues to add or strengthen services where it sees stronger commercial prospects. Its winter 2026/27 programme, for example, includes new leisure-oriented routes, including an unusual operation from Kuusamo in northern Finland, where an aircraft will be stationed during the peak winter tourism season.
This indicates that airBaltic is redistributing rather than simply cutting capacity: weaker services are being removed or reduced while aircraft are directed towards routes, seasonal markets or ACMI contracts expected to produce better returns.
The underlying problem is airBaltic’s financial position.
Although the airline substantially reduced its losses in 2025, it still reported a net loss of €44.3 million for the year. Its balance sheet also remains burdened by debt accumulated during its rapid fleet expansion.
In December 2025, Fitch Ratings downgraded airBaltic’s long-term issuer rating to CCC+, pointing to high leverage, weak financial flexibility and the need for significant external financing.
The situation became more difficult in early 2026 when the conflict in the Middle East caused aviation fuel prices to rise sharply. The Latvian government consequently considered a €30 million short-term loan to help the airline deal with the additional costs.
Latvian Prime Minister Evika Sili?a described the financing as a short-term solution and called for airBaltic to produce a new business strategy. The government has also made clear that attracting private or strategic capital remains important for the airline’s longer-term future.
AirBaltic itself has been seeking external financing while work continues on its revised business plan. The long-discussed initial public offering has effectively been postponed until market and financial conditions allow it.
The latest route reductions therefore mark an important change in emphasis for airBaltic.
Only months ago, the airline was highlighting ambitious network expansion, including additional routes and frequencies from Riga, Tallinn, Vilnius, Kaunas and Palanga. Its summer 2026 schedule was originally expected to encompass almost 110 routes across its bases.
The priority now appears to be capacity discipline: retaining commercially attractive routes, cutting or reducing weaker services, returning unnecessary aircraft, expanding revenue from ACMI operations and preserving cash while seeking longer-term financing.
That does not necessarily mean a wholesale shrinking of airBaltic. New destinations continue to be launched where the carrier believes demand justifies them. But the days of pursuing network growth almost regardless of short-term profitability appear, at least for the moment, to have been replaced by a much more selective approach.
For passengers in Lithuania, Latvia and Estonia, that is likely to mean further adjustments as airBaltic continues to examine its network route by route.
The key question is whether these measures will be sufficient to stabilise the airline’s finances – or whether a more fundamental restructuring will ultimately be required.
This post was published on 10 August 2026 21:22
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