airBaltic Files Chapter 11, Reviews 40 Airbus Deliveries as Flights Continue
airBaltic is continuing scheduled flights while asking a U.S. bankruptcy court for the time and protection needed to shrink the airline behind them. The Latvian carrier voluntarily filed for Chapter 11 protection in New York on September 14, putting deliveries from a $3.5 billion order for 40 additional Airbus aircraft and $106.7 million in related Pratt & Whitney engine commitments under review.
The airline says flights will operate as scheduled during the court-supervised process, which it expects to complete by June 2027. Chapter 11 therefore does not mean an immediate shutdown. It gives airBaltic a protected framework for continuing operations while negotiating with creditors, aircraft lessors and other stakeholders. For passengers, the near-term message is continuity; for employees, suppliers and Baltic-region travelers, the longer-term picture points to a smaller operation.
A fleet order becomes a restructuring lever
airBaltic operates approximately 50 Airbus A220-300 aircraft, the product of a growth strategy that once envisaged a fleet of as many as 100 aircraft. The bankruptcy filing says the company now intends to seek cancellation or deferral of its 40 outstanding Airbus deliveries. It had already approached Airbus about postponing deliveries after 2026.
That distinction matters. Deferring an aircraft shifts capital and financing requirements into later years, while cancellation removes planned capacity more decisively and can create a separate negotiation over contractual obligations. The filing does not establish how many aircraft will ultimately be canceled rather than deferred, or the terms Airbus and Pratt & Whitney may accept. It does establish that fleet commitments are central to the restructuring rather than a secondary cost item.
The reset extends beyond aircraft that airBaltic would operate on its own network. Management expects to reduce its wet-lease business, under which it supplies aircraft and crews to other airlines for a fee. That activity can improve aircraft utilization and generate revenue outside the carrier’s home network, but it also requires enough fleet and staffing capacity to meet commitments to partner airlines. A smaller wet-lease operation would reduce that exposure while also removing one source of revenue and flexible capacity for customers.
Scheduled service can continue while capacity contracts
The operating contraction was becoming visible before the Chapter 11 filing. Under airBaltic’s revised network plan, the number of nonstop routes across Riga, Tallinn and Vilnius is set to fall from 112 to 78 for summer 2027. Riga remains the primary hub, while Tallinn and Vilnius face deeper reductions. Scheduled seats for winter 2026-27 were already projected to decline 10.8% systemwide from the previous winter.
These changes illustrate how the airline can keep flying without preserving its previous scale. Existing flights can continue during bankruptcy even as future schedules, aircraft assignments and partner-airline flying are reduced. Concentrating service around Riga may help align aircraft use with stronger routes, but fewer nonstop destinations can mean less choice or additional connections for some Baltic travelers.
Employment will adjust with that smaller operating footprint. CEO Erno Hilden said airBaltic was discussing a workforce adjustment with labor unions as a consequence of existing capacity-reduction plans. The airline employs more than 3,000 people, but no final job-cut number has been confirmed.
New financing buys time at a substantial cost
airBaltic has secured a conditional commitment for €350 million in restructuring financing from lenders including Strategic Value Partners, Barclays, Hayfin Capital Management, Morgan Stanley and Oaktree Capital Management. The facility requires court approval and carries an interest rate of about 12%, according to Hilden.
That is expensive financing, but it is materially below the 25% rate attached to an earlier proposal for as much as €257 million in super-senior debt. Together with cash generated by ongoing operations, the new commitment is intended to support the airline through Chapter 11 while it seeks €44 million in annual profit improvement.
The balance-sheet pressure remains substantial: airBaltic reported approximately $583 million in funded debt and finance-lease liabilities, along with €106 million owed in payroll taxes and airline taxes and fees. Its 2025 revenue was approximately €779 million. The Latvian government, which is the majority owner, continues to seek a strategic investor; Lufthansa holds a 10% minority stake.
Court approval of the financing is the immediate milestone, but the more consequential negotiations will determine how much of airBaltic’s former expansion plan survives. By the targeted June 2027 exit, the carrier must show that it can preserve essential Baltic connectivity while supporting fewer aircraft, fewer leased-out crews and a reduced workforce without allowing the cost of its rescue financing to recreate the pressure Chapter 11 is intended to relieve.
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By Thomas Caldwell — AMI’s senior editor for mechanical and mobility engineering, covering vehicle electronics, systems integration, electrification, chassis systems, propulsion, and safety policy.
