Silina says she is ready to let coalition break up to secure Greens/Farmers' support for airBaltic loan

RIGA - Prime Minister Evika Silina (New Unity) said Wednesday that she is ready to let the government coalition break up if that helps secure the Union of Greens and Farmers' support for a short-term loan to Latvia's national carrier airBaltic.

The prime minister writes on X that Greens/Farmers on Tuesday offered their support in the parliamentary vote on the loan to airBaltic in exchange for Transport Minister Atis Svinka's (Progressives) resignation.

"If a disintegration of the coalition is the price for securing support for airBaltic, I am ready," Silina said, stressing that support to the airline is more important to her as keeping the government coalition together.

Silina is inviting coalition partners for a discussion on Thursday "to decide on the ability to work together in national interests".

As reported, Harijs Rokpelnis, head of the Greens/Farmers group in the Saeima, told reporters following the group's meeting with Svinka and Silina that Greens/Farmers have not yet made a decision on the short-term loan for airBaltic and that they want to continue discussions on the matter.

The Greens/Farmers' Saeima group has a clear vision of how airBaltic, a company of national importance, could be turned into a competitive and profitable business, said Rokpelnis, adding that, "of course, a number of preconditions are necessary."

"We have reached out to our colleagues to inform them of our vision of what this solution should look like," Rokpelnis said, without revealing what the Greens/Farmers were actually proposing to do.

Silina and Svinka also declined to comment on what the Greens/Farmers had proposed after meeting with the Greens/Farmers' Saeima group on Tuesday. "The Progressives' board will convene for a meeting in the near future to discuss the matter, and we will propose our own vision," said Svinka.

airBaltic is an important company not only in economic terms, but also as a long-standing Latvian brand, said Silina. Without the willingness to appreciate this brand, finding a solution will be difficult regardless of political affiliation, she said.

Silina said that she had already started talks with the opposition last week to jointly seek solutions, both in the context of the crisis in the aviation industry and the necessary changes to the company's business plan. She believes that the political discussions are also affected by the upcoming elections and concerns about how to explain to the public an unpopular decision to provide additional funding to the national airline for its day-to-day operations. However, it is precisely such an open discussion that can bring the parties closer to a decision, she said.

The main challenge is to explain this decision to the public, said Silina. Although some people understand the situation, it is generally difficult for residents to understand the complex political processes when additional funds need to be allocated from the state budget. At the same time, these funds belong to the people, just as airBaltic in fact does, she added.

Silina described the current situation as an impasse, as not all information about a partly private and partly state-owned company operating in fierce international competition could be made public. Therefore, she said, a politically sensible way out of this situation had to be found.

Rokpelnis stressed that the first step was to be absolutely sure about how the company would change its business model in order to actually become profitable. This is the most important issue, he said. At the same time, he stressed that Saeima had to arrive at a decision that would be the most economically beneficial for the people and economy of Latvia, he said.

As reported, the Transport Ministry has indicated that external factors such as the conflict in the Middle East, rising fuel prices and the suspension of certain routes have had a significant impact on airBaltic's costs, and the airline needs a EUR 30 million loan to ensure the company's stable operations until the implementation of its new business plan.

However, the Saeima Budget and Finance (Taxation) Committee did not approve the decision because of objections raised by the Union of Greens and Farmers.

LETA also reported, airBaltic's losses last year amounted to EUR 44.337 million, which is 2.7 times less than in 2024. Last year, airBaltic's turnover increased by 4.2 percent compared to 2024 and amounted to EUR 779.344 million.

In 2025, the airline carried a total of 5.2 million passengers on its route network, an increase of 1 percent compared to 2024.

At the end of August last year, German national airline Lufthansa became a shareholder in airBaltic. Currently, the Latvian state owns 88.37 percent of airBaltic shares, Lufthansa - 10 percent, financial investor Aircraft Leasing 1, owned by Danish businessman Lars Thuesen - 1.62 percent, and other shareholders - 0.01 percent. The company's share capital is EUR 41.819 million.

After the initial public offering (IPO) of airBaltic shares, the size of Lufthansa's stake will be determined by the potential IPO market price. The transaction also provides that Lufthansa will own at least 5 percent of airBaltic's capital after the potential IPO.

On August 30, 2024, the Latvian government agreed that the state should retain at least 25 percent plus one share in airBaltic's capital after the IPO. On August 19, 2025, the government decided that Latvia, like Germany's Lufthansa, would make a co-investment of EUR 14 million in airBaltic ahead of a potential IPO.

However, given the 2025 financial results and market conditions, airBaltic has suspended its planned IPO and does not currently view it as a potential source of capital for 2026, according to airBaltic’s annual report.

The report indicates that, despite the expected improvement in operational and commercial performance, the airline will operate with a negative free cash flow in 2026, and, based on current forecasts, management expects that an additional capital injection of EUR 100 to 150 million will be required to finance operations for the 2026/2027 winter season.

Transport Minister Atis Svinka (Progressives) has noted that an IPO is not the only way to raise capital, and the airline’s management has been given the broadest possible mandate to seek opportunities to raise capital using various financial instruments. Thus, the airline’s goal for 2026 is not only to reduce costs but also to raise capital.