AirBaltic Eyes Restructuring with Chapter 11 Bankruptcy Approval

AirBaltic has received court approval to undergo Chapter 11 bankruptcy, allowing it to restructure its debt. The airline, seeking financial relief due to increased pressure, has secured €350 million in financing and aims to complete its reorganization by June 2027. Challenges remain, including objections from bondholders.

In a significant financial move, Latvian airline airBaltic has been granted approval by a U.S. bankruptcy judge to initiate Chapter 11 proceedings, enabling the company to reorganize its debt structure. The announcement was confirmed by Prime Minister Andris Kulbergs on Wednesday.

The majority government-owned air carrier voluntarily filed for Chapter 11 protection amid pressures exacerbated by the Iran conflict, and has locked in €350 million in financing. Over the upcoming months, airBaltic is set to engage in negotiations with various stakeholders as part of its strategic restructuring plan.

However, the company's financial pathway isn't without hurdles, as bondholders have voiced objections to the proposed financing terms. The court proceedings will continue as airBaltic aims to finish its restructuring efforts by mid-2027, targeting a leaner fleet and more sustainable operating costs.