airBaltic Files for Chapter 11 Bankruptcy to Restructure Debt

The Latvian national airline airBaltic filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York on September 14, 2026. The carrier is seeking to restructure its financial obligations following a 70.1 million euro loss in the first quarter of 2026 and acute financial stress caused by a surge in jet fuel prices linked to the war with Iran. The airline also cited the loss of transit traffic from Russia, Belarus, and Ukraine as contributing factors.

To maintain operations, airBaltic secured a 350 million euro debtor-in-possession financing commitment arranged by Strategic Value Partners and funded by a consortium including Barclays, Morgan Stanley, Oaktree Capital Management, and Hayfin Capital Management. This funding replaces a previous plan to raise 257 million euros from bondholders at a higher interest rate. The airline intends to use the court-supervised process to cancel or defer 3.5 billion dollars in aircraft orders from Airbus and 106.7 million dollars in engine orders from Pratt & Whitney.

As part of a revised business plan, the airline will reduce its fleet from 54 to 36 aircraft by the end of 2026 and is consulting with labor unions regarding workforce reductions. The company aims to exit bankruptcy by June 2027. Despite the filing, airBaltic maintains that all scheduled flights and customer services will continue without interruption. The airline is currently majority-owned by the Latvian government, with Deutsche Lufthansa AG holding a 10% stake; Lufthansa has stated it does not plan to increase its investment.