In early April, Latvian Prime Minister Evika Siliņa suggested that the operations of the state-owned airBaltic could be coordinated jointly by all three Baltic states. Siliņa did not specify exactly what Latvia expects from Estonia and Lithuania this time around.

To date, Estonia has declined to acquire a stake in the airline. Even now, members of the Riigikogu from across the political spectrum maintain that Estonia should avoid buying a direct stake in the financially troubled carrier.

Reili Rand, a member of the Social Democratic Party's parliamentary group, told ERR that the future of aviation is fraught with uncertainty due to rising fuel prices and intense competitive pressure across the sector.

"When discussing how to spend Estonian taxpayers' money in such a turbulent climate, we must act with extreme responsibility. AirBaltic's need for cash has been significant and growing for years; I don't see any reason or opportunity for the Estonian state to enter what appears to be a bottomless financial hole," Rand stated.

Rand noted that the experience of Tallinn Airport shows the market is functioning well, driven by Estonians' consistent need for air travel.

"Even when one airline exits a route, another typically steps in. Competition has remained strong, and new players have been able to capture market share quickly. With nearly three million passengers a year, our market follows a logical and sufficiently attractive path for carriers," Rand said.

Rand added that Estonia has made strategically sound choices by keeping its aviation portfolio diverse. "Unlike our southern neighbors, we are not dependent on a single airline. If the state begins clearly favoring one company, it stifles competition and increases future risks," she explained.

"Of course, certain strategic direct routes are vital for Estonia, and we already have a functioning tool to support them: the route support fund. For example, the Tallinn–Hamburg route opened just last week, providing an important connection to northern Germany. For such routes, we can review the fund's conditions and direct additional resources if airBaltic's situation significantly impacts our connectivity. We can increase funding, extend support periods, or adjust terms," Rand suggested.

While acknowledging that airBaltic is a matter of national survival for Latvia, Rand emphasized that Estonia's situation is different. "We have a well-functioning, competition-based approach. Given the uncertainty of the aviation industry, we cannot begin filling airBaltic's money pit with Estonian taxpayers' funds," she said.

Despite these concerns, Rand expressed hope that airBaltic will resolve its financing needs and that any impact on Estonian travelers will remain minimal.

Marek Reinaas of the Eesti 200 party expressed his conviction that the state should interfere with private business as little as possible, doing so only when strategically vital.

"In aviation, Estonia has pursued a strategy of supporting Tallinn Airport to ensure that a variety of airlines fly to many different destinations. I believe this is the correct decision," Reinaas said. "I would not recommend acquiring a stake in airBaltic—not for the state, not for a company, and not for any private individual. It would be a high-risk investment."

He added that while Estonia will certainly discuss any formal proposal from Latvia, the northen neighbour should not be responsible for covering airBaltic's losses.

Aivar Sõerd, a member of the Reform Party's parliamentary group, noted that Latvia has yet to make a concrete proposal. However, he remains skeptical of any potential deal.

"If such proposals are made, they should be reviewed, but investing by acquiring a stake is out of the question. Estonia has already declined once, and the situation has significantly worsened since then," Sõerd stated.

Sõerd pointed out that while airBaltic's most recent annual report showed a slight decrease in losses, this was primarily due to the revaluation of dollar-denominated loans rather than operational success.

"AirBaltic has very little free cash or liquid assets, while its long-term liabilities exceed 400 million euros. Most of this—nearly 400 million—is held in bonds with an enormous 14.5% interest rate. This is extremely unusual and indicates immense risk. Investors have clearly assessed the company's risk as very high; bond prices have plummeted to 40% of their value on the stock exchange," the politician explained.

Sõerd also highlighted the company's vulnerability to volatile fuel prices, noting that airBaltic has hedged only 10% of its fuel costs.

"For comparison, Lufthansa and Ryanair have hedged up to 80%. The price per ton of jet fuel has already risen to nearly $1,500—more than double what it was at the beginning of the year—and there is no telling where prices will go next. With some Italian airports already imposing fuel supply restrictions, the situation is dire. Acquiring a stake would be equivalent to burning taxpayers' money; it is unthinkable," Sõerd said.

His party colleague, Õnne Pillak, echoed these sentiments.

"Estonia should not rely on a single airline; we should work to ensure that various carriers fly here. Therefore, the most reasonable course of action is to invest in the development of Tallinn Airport. A modern airport with sufficient capacity will make Estonia an attractive destination for diverse airlines and provide Estonians with better travel opportunities," Pillak concluded.

Anastassia Kovalenko‑Kõlvart of the Centre Party stated that her party also opposes an investment in airBaltic, noting that the airline has been operating at a loss for several years.

"They have faced serious problems, and such an investment would represent a significant additional cost. Given our very negative experience with Nordica, we would be acquiring a loss-making stake with little certainty of added value," Kovalenko‑Kõlvart said.

According to Kovalenko‑Kõlvart, Estonia should instead focus on diversifying the number of airlines operating at Tallinn Airport. However, she argues this is hindered by the government's requirement that the airport pay dividends.

"The airport has recently raised its service fees, and as a result, several low-cost routes have left Estonia. Competition has weakened, and there are no longer enough operators offering affordable prices to Estonians. We are in a situation where the government has required the airport to pay as much as seven million euros in dividends this year. To cover this, the airport raises its fees, driving routes and operators out of the market. This is the issue we should be focusing on, rather than acquiring a stake in a Latvian airline," Kovalenko‑Kõlvart explained.

The politician added that instead of paying dividends to the state, the airport should be permitted to reinvest that capital into its own development.

The loss-making airBaltic has struggled to raise additional capital. Plans for an Initial Public Offering (IPO) to list shares on the stock exchange are currently off the table, as geopolitical instability—including the war in the Middle East—has cooled investor interest. While Lufthansa recently took a stake in the carrier, the long-term financial outlook remains a subject of intense debate among Estonia's neighbors.

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