AirBaltic Wins US Court Approval for Chapter 11 Bankruptcy Protection

A U.S. court has granted approval for Latvian airline airBaltic to enter Chapter 11 bankruptcy protection, allowing the carrier to proceed with a planned financial restructuring. The development was announced by Latvian Prime Minister Andris Kulbergs in a social media post on Wednesday.

Path to Restructuring

The court's decision follows a voluntary filing by airBaltic on Monday. According to the prime minister, the approval enables the airline to immediately access financing, formally begin its restructuring, and review its obligations to creditors. The carrier, which is majority-owned by the Latvian state, sought protection to address its significant debt load amid financial pressures reportedly exacerbated by the Iran war.

In a statement on X, Kulbergs said, "This means that airBaltic will be able to: immediately access financing; begin the restructuring process; review obligations to creditors. Work continues."

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Financial Details and Outlook

As part of its restructuring strategy, airBaltic has stated it secured a commitment for €350 million (approximately $404.1 million) in financing from certain lenders, which is now subject to final court approval. The Chapter 11 process will involve several months of negotiations with key stakeholders, including bondholders, aircraft lessors, and other creditors.

The airline's objective is to formulate a formal reorganization plan that will require a separate court approval before it can exit bankruptcy. AirBaltic has indicated it aims to complete this process by around June 2027, emerging as a leaner operation with a reduced fleet and lower operating costs.