Latvian airline AirBaltic is seeking €225 million in interim financing to meet short-term liquidity needs, with the aim of reaching a permanent financing solution through this bridge funding. The state-owned carrier announced that it requires long-term financing of up to €225 million and an additional €100 million in new equity to support its operations.
A bondholder meeting scheduled for earlier this week, where the airline planned to seek approval for the short-term financing, was cancelled due to a lack of quorum. The meeting has been rescheduled for 17 August. Three days before this rescheduled vote, AirBaltic is required to pay interest on its loan payments.
The carrier has outlined a turnaround plan that includes cutting costs and swapping much of its existing bond debt for equity. This strategy marks a shift from its previous business plan, which was prepared for a public offering and envisaged steady growth in passenger numbers and ticket revenues across the Baltic states and wider European markets.
Strategic shift and fleet reduction
AirBaltic presented a new business plan on Tuesday that was approved by the company’s council to maintain the competitiveness of the airline. The updated plan prioritizes financial stability first and growth second, aiming to align the network, fleet, cost base, and capital structure with current market conditions while maintaining its role in providing connections in Latvia and the Baltic states.
Instead of broad expansion, the airline will focus on strengthening its presence in existing markets and flying more frequently where demand and profitability are highest. Riga, Latvia remains the main hub. The carrier plans to reduce its fleet to about 36 Airbus A220-300 aircraft by the end of this year, down from the current 54.
The fleet is expected to gradually grow to about 40 aircraft by 2031, with flight volumes remaining broadly stable. To increase revenues, AirBaltic will focus more on leasing its aircraft and crew to other airlines. The plan targets annual savings of €45 million through operational cost reductions and new revenue opportunities.
Financially, the airline reported a loss of €44.34 million last year, which was several times smaller than in 2024. Revenue grew by 4.2% compared with 2024, reaching €779.34 million. According to the new business plan, revenues are projected to reach nearly €800 million next year, €900 million in 2029, and exceed €1 billion by 2031.
AirBaltic stressed that the new business plan does not affect its daily operations or services to passengers, and all scheduled flights will operate as planned.
