AairBaltic has been ordered to secure new investors by late Q4 2026 following its voluntary filing for Chapter 11 bankruptcy protection in the United States. The decision comes as the Latvian state-owned carrier navigates a severe financial crisis exacerbated by escalating jet fuel prices linked to geopolitical conflicts and ongoing Pratt and Whitney engine issues. The airline filed for Chapter 11 protection in the US Bankruptcy Court for the Southern District of New York on 14 September 2026. At the time of filing airBaltic had accumulated approximately €503m in funded debt and an additional €856m in aircraft lease obligations.
The court has approved an interim €350m debtor-in-possession financing facility to keep day-to-day operations running. An initial tranche of €140m has been cleared for immediate access backed by a consortium including Barclays Morgan Stanley and Oaktree Capital Management. The emergency capital comes at a steep price carrying an interest rate of SOFR plus 8 pc roughly 12 pc total. To stabilise its cash flow and meet court expectations airBaltic is drastically scaling back its expansion plans. The airline is shrinking its active fleet from 54 down to 36 Airbus A220-300 aircraft by the end of 2026. Plans to grow the fleet to 100 aircraft have been abandoned.
It is working to cancel or defer an existing $3.5bn (€2.99bn) order for 40 additional Airbus planes and over $100m (€85.5m) in Pratt and Whitney engines. According to internal documents the carrier is even eliminating baseline cabin amenities such as removing seatback sick bags and bathroom disinfectant gels starting 1 October 2026 to save costs. The restructuring is shaking up aviation market share in northern Europe. Ryanair quickly announced a $1.6bn (€1.37bn) investment strategy in the Baltic states aiming to double its traffic and base 16 aircraft in the region to absorb the capacity airBaltic is leaving behind. Despite the ongoing bankruptcy proceedings airBaltic maintains that passenger flight schedules ticket validity and reservations will continue to operate normally through the restructuring timeline expected to conclude around June 2027.
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