Full Breakdown
airBaltic launches U.S. Chapter 11 restructuring while keeping flights alive
By Drooid · · How we work
Core Event
On September 14, 2026 airBaltic Corporation and its subsidiaries filed for voluntary Chapter 11 protection in the Southern District of New York. The court-supervised restructuring, expected to conclude around June 2027, will not affect scheduled services, ticket sales or customer-service operations.
Background & Context
AirBaltic’s rapid expansion—building an all-Airbus A220-300 fleet of 54 aircraft—was hit by Pratt & Whitney engine issues, loss of transit traffic from Russia, Belarus and Ukraine, and a sharp rise in jet-fuel prices after the U.S.–Iran war. In August 2026 the carrier revised its business plan, scaling back from a 100-aircraft ambition to a smaller, Riga-centric network. Earlier financing attempts, including a €257 million bond proposal at a 25 % interest rate, failed to secure creditor support, prompting the Chapter 11 route.
Timeline
- August 20 – Latvian parliament passed legislation to aid airBaltic’s financial stabilization.
- September 3, 2026 – airBaltic secured an interim €257 million financing package.
- September 14, 2026 – Chapter 11 filing in New York.
- September 15 – Rescheduled bondholder vote originally due September 11.
Data & Statistics
- Fleet: 54 A220-300s (two stored); 15 owned, the rest on dry lease.
- Debt & Liabilities: About $583 million in funded debt and finance-lease obligations; €106 million in unpaid payroll taxes and airline fees.
- Financing Commitment: €350 million debtor-in-possession (DIP) facility arranged by Strategic Value Partners and funded by Barclays, Hayfin Capital Management, Morgan Stanley and Oaktree Capital Management, at roughly 12 % interest (SOFR + 8 %).
- Revenue & Loss (2025): €779 million revenue; €44 million net loss.
- Profit-Improvement Target: €44 million annual profit uplift projected under the restructuring plan.
Official Statements & Responses
Management said the Chapter 11 process provides a “clear framework and timetable” to negotiate with creditors, lessors and other stakeholders while preserving day-to-day operations. The airline will continue to meet obligations to suppliers and service providers, and the existing board will remain in place. Lufthansa Group, a 10 % minority shareholder, has not indicated any additional capital injection.
Conflicting Reports & Gaps
Sources differ on the precise timeline for completion: some cite “around June 2027,” while others simply state “June 2027.”
Verbatim Quotes
- “For our passengers, our operations continue as normal. We are flying, selling tickets and planning our future schedule.” — AirBaltic Chairman Andrejs Martinovs
- “I view this solution as one of the best options for ensuring airBaltic's viability, as it provides the necessary tools and time to implement the restructuring plan,” — Prime Minister Andris Kulbergs
- “This gives them a protective framework to put their house in order... I don't see why airBaltic wouldn't do the same as SAS,” — Analyst John Strickland
What’s Next
AirBaltic will seek court approval to draw down the €350 million DIP facility in the coming days. The restructuring will address aircraft lease terms, debt restructuring and a revised fleet plan targeting 36 A220-300s by the end of 2026, with a gradual increase to about 40 aircraft by 2031. Creditors, bondholders and potential investors will be consulted over the next months as the airline works toward a reorganization plan to be submitted before the anticipated June 2027 deadline.