Air Baltic Files Chapter 11 with €350M Debtor-In-Possession Financing

airBaltic filed a voluntary Chapter 11 petition in New York on September 14, 2026, securing a €350 million debtor-in-possession financing commitment to support operations during its restructuring. The carrier said flights, ticket sales, reservations and customer service would continue normally.

The case went to the U.S. Bankruptcy Court for the Southern District of New York. The airline expects the court-supervised process to conclude around June 2027.

Erno Hilden, airBaltic’s president and CEO, said the financing still requires court approval. It carries an interest rate of about 12%.

“Our focus is on continuing to run the airline while implementing the changes set out in our new business plan.”

“For our passengers, our operations continue as normal. We are flying, selling tickets and planning our future schedule.”

The financing group includes Strategic Value Partners, Barclays, Hayfin Capital Management, Morgan Stanley and Oaktree Capital Management. Dollar conversions cited for the commitment ranged from $404 million to $405 million, depending on the timing of the exchange-rate calculation.

The financing will carry a steep rate while creditors negotiate

The new funding is intended to give the carrier cash to operate while it addresses international financial obligations and creditor claims. About 12% is the stated rate, subject to the court’s approval of the arrangement.

The case also gives management a legal framework for negotiations with aircraft lessors and other creditors. The airline said its management and supervisory boards would remain in place during the restructuring.

The petition identifies the debtor as AIR BALTIC CORPORATION AS. Court records list case number 26-12188.

The court case gives airBaltic time to keep flying and restructure

AirBaltic described the filing as voluntary. Its stated objective is to reorganize debt while maintaining service and Latvia’s air connectivity.

The carrier’s financial pressure emerged amid a wider aviation crisis linked to the Iran war. The restructuring gives the company court protection while it seeks agreements with creditors and lessors.

Bondholders rejected a path that would have ended in liquidation

Latvian Prime Minister Andris Kulbergs said bondholders holding more than 70% of the debt value chose liquidation instead of supporting the route that led to the Chapter 11 filing.

The Latvian government remains airBaltic’s majority owner. The government’s ownership places the restructuring alongside a broader public interest in preserving the country’s air links.

Andrejs Martinovs, chairman of airBaltic’s supervisory board, said the court process would establish a timetable for negotiations.

“Under court supervision and with protection from creditor claims, this process provides a clear framework and timetable for reaching agreements with creditors, including aircraft lessors and other stakeholders.”

Martinovs said the carrier’s priority was to keep flying and maintain Latvia’s connectivity while “substantially” reducing its obligations. He said that would support the airline’s long-term financial sustainability.

Management is targeting €44 million in yearly profit improvement

Hilden said the business plan includes an estimated €44 million in annual profit improvement.

“In the coming months we will engage with all our stakeholders to agree on sustainable terms,”

The statement points to negotiations with creditors as the next stage of the restructuring. Court approval of the financing could allow the airline to use the funds as early as Monday or Tuesday.

The carrier has not announced a suspension of flights or ticket sales. Its target remains completion of the reorganization around June 2027.