airBaltic is focusing on implementing chosen scenario - Martinovs

RIGA - Latvia’s national airline airBaltic is focusing on implementing the scenario selected in its business plan, said Andrejs Martinovs, chairman of the airBaltic supervisory board, in an interview with LETA, when asked whether there was any point at which shareholders would be asked to decide on initiating insolvency or legal protection proceedings.

He acknowledged that there are always various options, but at present, airBaltic is focused on what is outlined in the business plan.

Martinovs added that consultants and the executive board had also been tasked with developing a scenario and business plan, and securing financing for it, that would best align with the shareholders’ letter of expectations. "Other options outlined in this letter of expectations may be more long-term and, as such, are not a priority," Martinovs emphasized.

When asked whether the business plan took into account lessons learned from the experiences of other airlines that have been in a similar situation, Martinovs emphasized that one assurance is that airBaltic has engaged the "top-tier" consultant in this field - Seabury Securities LLC.

He noted that there are currently two airlines flying to Riga that previously worked with the same consultant and successfully implemented a strategic shift - Norwegian and Scandinavian Airlines (SAS).

"In my opinion, this is also one of the keys to success - choosing not the cheapest, but the most experienced and strongest consultant currently available," emphasized Martinovs.

As reported, airBaltic has reached an agreement with certain existing bondholders and third-party finance providers for up to EUR 257 million of interim financing, the airline informed LETA.

The financing is intended to strengthen the company’s liquidity and provide the financial resources needed to implement its new business plan, according to the company.

The proposed financing remains subject to the required approvals from airBaltic’s bondholders and shareholders.

The bondholder meeting to consider the proposal has been convened for September 11, 2026.

The airline's representatives explain that, subject to these approvals and other applicable conditions, EUR 180 million is expected to become available shortly following bondholder approval. A further EUR 77 million would become available once additional conditions have been met.

The interim financing is expected to be raised by issuing new bonds maturing on February 26, 2027. The interest rate on the bridge financing is set at 25 percent per year.

As reported, the airBaltic board has approved a business plan that, among other things to improve liquidity, provides for raising EUR 225 million in temporary financing by utilizing the existing collateral package for the 2029 senior bonds.

In the long term, the company is expected to be recapitalized with up to EUR 225 million in new debt and EUR 100 million in new equity, while a portion of the existing 2,029 bonds will be converted into company shares, with the remainder replaced by new, smaller debt of up to EUR 125 million.

The business plan also calls for the airline to operate 36 Airbus A220-300 aircraft by the end of 2026, compared to 54 aircraft currently, with the fleet gradually expanding to approximately 40 aircraft by 2031.

The airBaltic group’s revenue last year increased by 4.2 percent compared to 2024, totaling EUR 779.344 million. Meanwhile, airBaltic group’s losses last year totaled EUR 44.337 million, which is 2.7 times less than in 2024. The airline carried a total of 5.2 million passengers in 2025, which is 1 percent more than in 2024.

Last summer, Germany’s national airline, Lufthansa, became a shareholder in airBaltic. Currently, the Latvian government owns 88.37 percent of airBaltic’s shares, Lufthansa holds 10 percent, the company Aircraft Leasing 1, owned by Danish businessman Lars Thuesen, a financial investor, holds 1.62 percent, and 0.01 percent is held by other shareholders. The company’s share capital is EUR 41.819 million.

Taking into account the 2025 financial results and the market situation, airBaltic has suspended its planned initial public offering (IPO) and currently does not consider it a potential source of capital for 2026, according to airBaltic’s annual report.