Latvian airline Air Baltic files for bankruptcy protection in the USA

The troubled Latvian airline Air Baltic has filed for bankruptcy protection in the USA. The application was made voluntarily under Chapter 11 of US bankruptcy law, the company said in Riga. It is a financial restructuring procedure under court supervision. Flight operations and flight schedules are not affected, according to the statement from the state-owned company, which has been in financial difficulties for a long time.

US creditor protection is also accessible to companies outside the USA thanks to low legal hurdles.

Air Baltic flies to the five largest airports in Germany: Berlin, Düsseldorf, Frankfurt, Hamburg and Munich. The company is based in Riga and is the largest airline in the Baltic States. It flies from its Riga hub to more than 70 destinations, but does not offer flights to the United States or within the States.

Lufthansa holds a ten percent stake in the airline

The largest shareholder is the Latvian state with more than 88 percent. Lufthansa has held a ten percent stake in the airline since last year.

Together with the initiation of creditor protection proceedings, Air Baltic received a binding commitment from lenders to provide 350 million euros in new financing at an interest rate of twelve percent. This is intended to secure the company's liquidity and ongoing operations, the airline and the State Chancellery in Riga said. According to the information, Air Baltic expects to complete the process by around June 2027.

Head of government welcomes proceedings

"I see this solution as one of the best ways to ensure the viability of Air Baltic, as it provides the necessary tools and time to implement the developed restructuring plan," said Latvian Prime Minister Andris Kulbergs. The company is now beginning the settlement of its debts and liabilities, which has been postponed for years.