airBaltic Files for Chapter 11 Bankruptcy Protection, Secures €350 Million in Financing
Why It MattersThe filing highlights how fuel costs and conflict-driven route disruptions in Eastern Europe and the Middle East can strain even government-backed carriers, prompting court-supervised restructuring alongside continued normal operations.
Latvian flag carrier airBaltic has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York, citing high jet fuel prices and route disruptions in Eastern Europe and the Middle East stemming from conflicts in Ukraine and the Gulf region. The airline said the voluntary filing will not affect flight operations and that it will continue selling tickets and operating flights as normal during the proceedings.
The carrier has secured a commitment for €350 million in new debtor-in-possession financing, arranged by Strategic Value Partners and funded by Barclays, Hayfin Capital Management, Morgan Stanley, Oaktree Capital Management, and Strategic Value Partners. airBaltic said it will seek court approval to access the funds, which are expected to be sufficient to support continued operations throughout the bankruptcy process.
Earlier this summer, airBaltic had signaled financial stress when it canceled plans to expand its Airbus A220 fleet, adopted a new business plan, and arranged interim financing. Erno Hildén, president and CEO of airBaltic, said the focus is on continuing to run the airline while implementing the new business plan, adding that the process does not affect passengers' travel experience. airBaltic expects to complete the Chapter 11 process by June 2027. The airline is majority owned by the Latvian government, with Lufthansa Group holding a 10% stake.
