Latvian flag carrier airBaltic has officially filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of New York. The voluntary court filing is aimed at reorganising the airline's financial liabilities while allowing it to maintain ongoing flight activities. The carrier stressed that all flights and services will continue without interruption, operating according to schedule with all customer tickets remaining valid.
To ensure operational stability during the Chapter 11 restructuring process, airBaltic secured a commitment for a 350 million euro (approximately 405 million US dollar) debtor-in-possession financing package, subject to bankruptcy court approval. The funding arrangement was organized by Strategic Value Partners and is provided by a consortium including Barclays, Hayfin Capital Management, Morgan Stanley, Oaktree Capital Management, and Strategic Value Partners.
According to airBaltic, the liquidity provided by the debtor-in-possession financing package will support daily operational needs and customer services while management works on debt reorganisation. The airline's long-term goal is to establish a more sustainable capital structure and a solid financial foundation for its ongoing commercial flight network.
The carrier's decision to seek court protection follows mounting financial pressure exacerbated by high jet fuel prices and substantial fixed operating costs. Although airBaltic received a 30 million euro short-term loan from the Latvian government in April 2026, the temporary capital infusion provided only short-term liquidity before further funding was required to cover short-term financial obligations.
Financial analysis from credit rating agency Fitch indicated that airBaltic was exposed to roughly 160 million euros in lease commitments for its aircraft fleet alongside a 57 million euro bond coupon payment. Fitch forecast that the carrier would generate negative free cash flow in 2026, as operational earnings were insufficient to cover its extensive aircraft leasing costs and bond obligations.