Latvian Airline AirBaltic Files for Chapter 11 Bankruptcy Amid Financial Struggles
AirBaltic, the flag carrier of Latvia, has filed for Chapter 11 bankruptcy protection in a U.S. court on September 14, 2026. The airline cited acute financial stress caused by rising jet fuel prices and geopolitical tensions as key factors behind its decision to seek restructuring under the Bankruptcy Code. Despite securing €350 million in debtor-in-possession financing from lenders including Strategic Value Partners, Barclays, and Morgan Stanley at an SOFR rate of 8%, AirBaltic struggled with short-term liquidity needs that led it to file for protection. The bankruptcy filing is part of a broader trend among airlines struggling under financial pressure. Earlier this year, Spirit Airlines collapsed in May after multiple Chapter 11 filings failed to stabilize its operations amid soaring fuel costs and operational challenges. AirBaltic's restructuring process is expected to last until June 2027 and will involve reducing its fleet size from 50 Airbus A220-300 planes while seeking new investment. The Latvian government supports the move, with Prime Minister Andris Kulbergs stating that bankruptcy protection offers necessary tools for restructuring. AirBaltic claims flight operations and ticket sales will continue as usual during this period.
Topics: airline industry bankruptcy Chapter 11 geopolitical factors