The Latvian government has decided to inject a further EUR14 million euros (USD16.3 million) into state-owned airBaltic (BT, Riga) to boost the carrier's finances until it is able to conduct its long-touted initial public offering.

The cabinet discussed the situation facing the flag carrier during a meeting on August 19. Transport Minister Atis Švinka told the national news agency LETA later that the government always had an option to match the investment of Lufthansa Group, which injected EUR14 million earlier this year for rights to a 10% stake in the airline. Prime Minister Evika Siliņa told the media that as the state investment was tied to the injection of private capital by the Lufthansa parent, it was in line with European Union state aid rules. Any standalone capital injection by the government would be banned as illegal.

Švinka said that the funds would be reallocated from the budgets of the ministries of finance and transport. He added that, for now, no further investments in the airline are necessary or planned.

Earlier this year, the Latvian government contacted its counterparts in Lithuania and Estonia to entice them to co-fund the airline. Tallinn refused to get involved, but Vilnius is currently conducting an in-depth study. While airBaltic is Latvia-based and currently 97.97%-owned by this country's government, it also has bases at Tallinn Lennart Meri and Vilnius and is the largest local carrier serving Estonia and Lithuania.

airBaltic has long been aiming to list on the stock market, but the IPO, initially scheduled for 2025, has been delayed to at least 2026 due to market volatility. The airline hopes to raise enough cash from the debut to fund future growth and at least partially refinance expensive bonds, priced at 14.5%, which airBaltic issued in 2024 to raise EUR380 million (USD412 million at the time).

Following recent approval by the German competition watchdog, Lufthansa expects to complete its stake acquisition by the end of August. Currently, the only private shareholder of the airline is Aircraft Leasing 1, an SPV for Danish investor Lars Thuesen, which owns a 2.03% stake.