airBaltic (BT, Riga) has filed for Chapter 11 bankruptcy protection before the United States Bankruptcy Court for the Southern District of New York, court filings revealed on September 14, 2026. The company confirmed in a press release that all operations will continue as normal while the proceedings last.

"We have carefully assessed the restructuring options available to the company, with one priority in focus - to give airBaltic the best possible basis to continue operating and to build a sustainable financial structure. Under court supervision and with protection from creditor claims, this process provides a clear framework and timetable for reaching agreements with creditors, including aircraft lessors and other stakeholders. At the same time, it allows the company to continue operating," supervisory board chairman Andrejs Martinovs said in a written statement.

The carrier added in its filing that its liquidity position deteriorated after its EUR30 million euro (USD34.6 million) state loan in April 2026 “partly due to additional challenges, including increased fuel costs arising from the crisis in the Middle East.”

The carrier announced its reorganisation after it concluded that previously announced funding plans were unfavourable. The initial plans concerned airBaltic’s emergency financing in the amount of EUR257 million (USD297 million), which would come with a 25% interest rate on newly issued bonds. The funding proposal was backed by London-based Polus Capital Management and Israel's Klirmark Capital.

In its Chapter 11 documents, airBaltic revealed that it had four different financing proposals and multiple restructuring alternatives, including a restructuring under Part 26A of the Companies Act 2006 of England and Wales supported by the aforementioned interim bond financing; Chapter 11 proceedings in the US, supported by debtor-in-possession (DIP) financing; EU state aid; Latvian legal protection or insolvency proceedings; alternative private financing; and an orderly contingency plan.

While the board initially believed the Polus and Klirmark option was the most deliverable, the company and its advisors concluded that DIP financing was more favourable but was linked to Chapter 11 proceedings.

“The Executive Board has further concluded that because the proposed DIP Financing is available only in connection with proceedings under Chapter 11, commencing Chapter 11 proceedings represents the restructuring alternative that best preserves the value of Air Baltic and protects the interests of Air Baltic, its creditors, shareholders, employees and other stakeholders,” the filing says.

New financing plans

According to airBaltic’s filing, three companies will be undergoing the procedure in the US: Air Baltic Corporation AS, Air Baltic Training SIA, and Baltijas Kravu Centrs SIA. Air Baltic Corporation fully owns Air Baltic Training SIA and Baltijas Kravu Centrs SIA.

As a result of the DIP financing proposal, airBaltic has secured new financial backing in the amount of EUR350 million (USD404 million). The DIP proposal is backed by Strategic Value Partners and funded by Barclays, Hayfin Capital Management, Morgan Stanley, and Oaktree Capital Management. The financing comes with a Secured Overnight Financing Rate (SOFR) of +8% (i.e., approximately 12%), airBaltic stated.

The funds will be distributed to all three companies undergoing Chapter 11.

The Chapter 11 proceedings come after the Latvian government criticised the high interest rates in the initial agreement with existing bondholders.

"It must be acknowledged that previous negotiations with bondholders, who held 70% of the debt, regarding collateral recovery were difficult. A proposed loan of up to EUR257 million with a 25% annual interest rate might provide a short-term fix but would not resolve issues related to old debts and lease obligations. The government required a solution that would enable airBaltic to operate in the future without the need for repeated emergency loans," Prime Minister Andris Kulbergs said.