AirBaltic says it will continue flying from Tallinn
The future of Latvian airline airBaltic is in the hands of its creditors, Prime Minister Andris Kulbergs said. Potential strategic investors are waiting for airBaltic to become viable and profitable. Under the new business plan approved on Wednesday, the airline will fly to fewer destinations but with higher frequency.
Latvian Prime Minister Andris Kulbergs stepped out for the first time from behind the wall of business‑secrecy surrounding airBaltic and admitted that the situation is very serious. According to Kulbergs, the state as the majority owner effectively lost control of the airline years ago, when €380 million worth of bonds were issued at an enormous 14.5 percent interest rate.
"No company can bear such a burden if no changes are made and no strategic plan is reviewed. They simply continued flying. The state is essentially no longer the owner — airBaltic is in the hands of lenders. Rights over the company were lost in 2024 when €380 million in bonds were issued," Kulbergs said.
Now €225 million in bridge financing must be raised, using the bond collateral. The first bondholder meeting failed due to lack of quorum, and both the transport minister and airBaltic's leadership are now negotiating to ensure that the second meeting, planned for Monday, produces a result.
"The coming weeks are decisive. We will see whether bondholders support the chosen path and secure temporary financing, and whether the new business plan can attract new capital," Kulbergs said.
AirBaltic supervisory board vice‑chair Jurgis Sedlenieks confirmed to ERR that under the new business plan, the airline's main base will remain in Riga, and flights will continue from Tallinn and Vilnius. The number of aircraft will decrease and is expected to settle at around 40 in the future.
"The airline will reduce destinations, but flights to those that remain will operate several times a week. Some routes launched this summer from Tallinn — for example Tallinn–Vienna — will continue into winter. This shows that we are continuing in Estonia, which is a very important market for the company," Sedlenieks said.
According to the Latvian prime minister, strategic investors interested in airBaltic do exist, but they will not make a decision before the company's restructuring is complete.
"They are willing to continue negotiations once the company's strategy and issues related to lenders have been resolved," Kulbergs said.
The state cannot be the only party covering airBaltic's financial risks, even though it is one of Latvia's most important companies, the prime minister noted.
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Editor: Johanna Alvin, Argo Ideon
Source: ERR Aktuaalne kaamera
