Coming weeks will be crucial for airBaltic's ability to secure financing - Suvajevs

RIGA - The next two to three weeks will be crucial for airBaltic’s ability to secure the necessary funding, but the government should have done more to explain to the public why supporting the national airline is in the country’s best interest, said Andris Suvajevs, the prime ministerial candidate for the Progressives party, in an interview with LETA’s podcast "Politicians! What Was That All About?!".

According to the politician, the company must be able to secure EUR 225 million in bridge financing, as well as additional EUR 100 million from a strategic investor or investors by the end of the year. He acknowledged that these are high-risk moves and that there is no certainty that everything will turn out successfully.

At the same time, Suvajevs expressed support for the government’s decision to provide assistance to the airline, noting that the discussions lacked a broader explanation of the benefits to the state. According to him, key issues include maintaining Riga as airBaltic’s base, the company’s ownership structure, and the airline’s role in Latvia’s economy.

Commenting on accusations regarding the Progressives' responsibility during the time it headed the Ministry of Transport, Suvajevs pointed out that the then-management and board of airBaltic were not interested in making significant changes to the company’s business plan and financial structure. In his view, options for action at the political level were limited if the company’s management was unwilling to implement the necessary changes.

According to Suvajevs, this is precisely why decisions were made to make changes to the company’s board and management in order to implement the necessary reforms.

The politician also emphasized that airBaltic should be viewed not only as a commercial enterprise but also as a company with a broader impact on Latvia’s economy, employment, and the country’s international connectivity.

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 2,029 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.