Key facts
- Latvian airline airBaltic has filed for Chapter 11 bankruptcy protection in the US.
- The filing allows airBaltic to access financing and begin restructuring its debt.
- The airline cited rising fuel costs, driven by the Iran war, as a key factor in its financial difficulties.
- airBaltic has secured a commitment for €350 million ($404.1 million) in financing, subject to court approval.
- The airline aims to complete the restructuring process by June 2027 with a reduced fleet and lower operating costs.
Latvian airline airBaltic has filed for Chapter 11 bankruptcy protection in a U.S. court, a move that will allow it to restructure its debt and access new financing. Prime Minister Andris Kulbergs announced on Wednesday that a judge accepted the airline's request, enabling it to "immediately access financing; begin the restructuring process; review obligations to creditors."
The airline, majority-owned by the Latvian government, voluntarily filed for protection on Monday. It stated that it has secured a commitment for €350 million ($404.1 million) in financing from certain lenders, pending court approval. The company aims to complete its restructuring by around June 2027, with plans for a reduced fleet and lower operating costs.
airBaltic's financial distress has been exacerbated by rising fuel costs, which have been impacted by the ongoing Iran war. Airlines, particularly smaller ones, operate with thin profit margins and are vulnerable to geopolitical turmoil and cost increases. The conflict in the Middle East has disrupted oil supply routes, leading to higher crude oil prices and consequently, increased jet fuel costs.