airBaltic Files for Chapter 11 in a New York Court and Says Its Flights Will Keep Operating

On September 14, 2026, airBaltic filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the Southern District of New York. The Latvian flag carrier says every flight is operating as scheduled and that tickets, reservations and vouchers remain valid.

The airline enters the process with a commitment for 350 million euros (about $405 million) in debtor-in-possession financing. Strategic Value Partners arranged it, with Barclays, Hayfin Capital Management, Morgan Stanley and Oaktree Capital Management as lenders, at roughly 12% interest.

The loan still needs the court’s approval, which airBaltic says it will seek in the coming days. The company expects to complete Chapter 11 by around June 2027.

How airBaltic Got Here

The filing ends a rescue effort that ran all summer. In August, the airline approved a business plan that cut its A220 fleet by a third and asked bondholders to fund the transition.

The final version of that request sought up to 257 million euros in new super-senior debt at 25% interest. The vote was set for September 15, according to Air Data News, one day after the filing.

Latvian Prime Minister Andris Kulbergs said the company went to court after bondholders holding more than 70% of the debt’s value chose liquidation instead, as Reuters reported. He said airBaltic had burned through the 380 million euros it raised from bonds in 2024 by April, and that a 30 million euro emergency government loan ran out in June.

Fuel turned a slow squeeze into a crisis. The US war with Iran has doubled jet fuel prices, according to Reuters, at an airline that had already lost the transit traffic from Russia, Belarus and Ukraine through Riga that it once planned around.

“The company became too large for its market,” aviation analyst Simonas Bartkus told Reuters. In its court filing, airBaltic listed about $583 million in funded debt and finance lease liabilities, plus 106 million euros owed in payroll taxes and airline taxes and fees.

What Changes, and What Does Not

The existing management and supervisory boards stay in place, and airBaltic says it will keep paying suppliers in the normal course of business. “Our focus is on continuing to run the airline while implementing the changes set out in our new business plan,” said CEO Erno Hildén.

The bigger changes sit behind the scenes. Hildén told Reuters the airline is in talks with unions about “an adjustment in the workforce” at a company that employs more than 3,000 people, and that its wet-lease business, which rents out aircraft and crews to other airlines, will shrink the most.

The fleet is the other lever. airBaltic flies about 50 Airbus A220-300 jets and once planned to reach 100. A court filing seen by Reuters shows it will use Chapter 11 to cancel or defer outstanding deliveries on a $3.5 billion order for 40 more Airbus aircraft, along with $106.7 million of Pratt & Whitney engines.

Why a Latvian Airline Went to a US Court

Chapter 11 lets a company keep operating while the court shields it from creditor claims and a restructuring plan is negotiated. For an airline, the key counterparties are aircraft lessors and manufacturers, whose contracts make up much of its fixed cost.

airBaltic says its main financing, creditors and aircraft leases are international, so a single US process can deal with all of them at once. A national insolvency in Latvia would not reach lessors and lenders based elsewhere in the same way.

European carriers have taken this route before. SAS filed in the same New York court on July 5, 2022, and kept flying throughout a case that Reuters says ran until 2024. Hildén, SAS’s chief financial officer until June 2025, told Reuters that airBaltic is “targeting (the) same process.”

For travelers flying through Riga International Airport, where airBaltic is the dominant carrier, the airline says no action is needed. Refunds, gift cards and service credits are handled under its existing policies.