- The Latvian parliament passed an €80m financial stabilisation law for airBaltic
- The government can invest €30m in new bonds and capitalise €50m in existing bonds
- A €30m emergency loan repayment has been extended to 31 December 2026
- The Latvian state holds an 88.37pc stake in the airline
- The intervention is considered the airline’s last chance
The Latvian parliament passed the Air Baltic Corporation AS Financial Stabilisation Measures Law during an extraordinary session, establishing a special procedure for state participation to stabilise the national carrier’s pressing financial situation. The newly approved legislative framework authorises immediate measures to shore up airBaltic’s liquidity.
The government can invest approximately €30m to purchase additional interim financing bonds, and the state will capitalise €50m worth of airBaltic bonds it already holds into the company’s share capital. Repayment of a previous €30m emergency state loan issued in April has been extended until 31 December 2026. The Latvian state currently holds an 88.37pc stake in the flag carrier alongside minority partners including Lufthansa Group with 10pc.
The bill was rushed through two readings and a committee stage in a single day, reflecting the urgency of preventing a default. Prime Minister Andris Kulbergs noted that while the state should ideally avoid aviation business ownership, this intervention serves as the airline’s last chance given that airBaltic accounts for 1.5pc to 2pc of Latvia’s GDP. Management has adjusted its business model, reducing its target fleet, delaying its initial public offering and prioritising financial survival over aggressive growth.
Prime Minister Andris Kulbergs shared while the state should ideally avoid aviation business ownership, this intervention serves as the airline’s last chance given that airBaltic accounts for 1.5pc to 2pc of Latvia’s GDP. AirBaltic management representative shared the company has adjusted its business model, reducing its target fleet, delaying its initial public offering and prioritising financial survival over aggressive growth.
