Latvia’s national airline airBaltic has voluntarily filed for Chapter 11 bankruptcy protection in the United States, citing soaring jet fuel costs and mounting debt amid the ongoing geopolitical crisis.

The airline filed for protection in New York as part of a restructuring process aimed at reducing its debt burden and strengthening its financial position. The company has secured a commitment for €350 million in financing from its creditors to support the restructuring, subject to court approval.

airBaltic has around €583 million in funded debt and financial leasing obligations. The sharp rise in jet fuel prices, driven by the conflict involving Iran, has placed additional pressure on the airline’s finances and the broader aviation sector.

Flights to Continue During Restructuring

The airline said its flights will continue operating during the Chapter 11 process. The restructuring is expected to allow airBaltic to continue its operations while working with creditors on a more sustainable financial structure.

The company is also considering measures to reduce capacity and costs as part of the restructuring. Discussions with employee representatives over potential workforce reductions have begun, although the final scale of any job cuts has not yet been determined.

Fleet Reduction on the Agenda

airBaltic currently operates a fleet of Airbus A220-300 aircraft and has been under financial pressure due to high operating costs, rising fuel prices and debt obligations.

The airline plans to reduce its fleet as part of its restructuring strategy, while also seeking a strategic investor to strengthen its long-term financial position. The Chapter 11 process is expected to be completed by June 2027.

The Latvian government, which holds the majority stake in airBaltic, has supported efforts to stabilize the airline and maintain its strategic role in Latvia’s international air connectivity.

Source: Patronlar Dünyası/ Prepared by: İlayda Gök