airBaltic Files for Chapter 11 Bankruptcy Protection in the US as It Restructures Debt

airBaltic, Latvia's flag carrier, has filed for Chapter 11 protection in the US Bankruptcy Court for the Southern District of New York, beginning a court-supervised financial reorganization the airline expects to complete by June 2027. The filing follows a build-up of financial strain: the carrier already carried heavy debt and aircraft-leasing costs, and it was left exposed to a sharp spike in fuel prices when the US-Iran conflict pushed oil sharply higher, having gone into that period without adequate fuel hedging in place. Those pressures compounded a loss-making 2025, in which airBaltic posted a €44.3 million net loss despite generating €779.3 million in revenue. To keep operating through the process, the airline has lined up €350 million (about $405 million) in debtor-in-possession financing from Strategic Value Partners, Barclays, Hayfin Capital Management, Morgan Stanley and Oaktree Capital Management, priced at roughly SOFR plus 8 percent and still subject to court approval. As part of the restructuring, airBaltic is scaling back a fleet expansion it had previously pursued: its current 54 Airbus A220-300s will shrink to 36 by the end of 2026, before gradually growing back to around 40 by 2031, well short of the 100-aircraft target it had been working toward. CEO Erno Hildén said the airline's "focus is on continuing to run the airline while implementing the changes set out in our new business plan." Scheduled flights, ticket sales and existing bookings continue as normal throughout the process. The Latvian government holds an 88.37% controlling stake in airBaltic, with Lufthansa Group holding a 10% minority stake it acquired in 2025.