Latvia national carrier airBaltic has faced for a while financial difficulties which has indeed generated comments from Ryanair Group CEO Michael O’Leary, who has been predicting the bankruptcy of its rival for a couple of months…
In the meantime, Latvia’s government is preparing to make a pivotal decision on the future of national carrier airBaltic, with Prime Minister Andris Kulbergs warning that taxpayer funding alone can no longer sustain the airline. The Latvian state owns 88.37% of the airline.
In April, Latvia’s parliament approved a €30 million short-term state loan to support the carrier. The loan, granted without collateral, must be repaid in full, including interest, by August 31, 2026. The airline has already repaid the first €6.4 million installment.
Speaking to Latvian broadcaster TV3 a few days ago, Kulbergs said a long-term solution for airBaltic must include private investment alongside state support. He described the airline as a strategic national asset but stressed that the government must determine its future direction before the end of the summer.
“This summer, a decision must be made—either one way or the other. There is no third option,” Kulbergs said.
The Prime Minister noted he is currently reviewing the airline’s business plan and future proposals after requesting a comprehensive briefing from government officials.
One of airBaltic’s key strengths, according to Kulbergs, is its aircraft delivery positions, which could become increasingly valuable as airlines worldwide continue to face aircraft supply shortages and seek fleet expansion opportunities.
Another asset is the presence of Germany’s home carrier Lufthansa, which owns a 10% stake in the Latvian carrier and holds a position on airBaltic’s Supervisory Board, firmly establishing a strategic partnership. The two airlines have a wet-lease agreement, allowing Lufthansa Group to flexibly lease up to 21 of airBaltic’s Airbus A220-300 to service its own hubs and destinations.
Adjusted EBITDAR improved to a positive €7 million, compared with a loss of €4.3 million in the first quarter of 2025, reflecting stronger operational performance.
However, the carrier still posted a net loss of €70.1 million for the quarter, significantly wider than a year earlier. The company attributed the loss primarily to foreign exchange fluctuations, including a €36.5 million impact from the strengthening U.S. dollar on long-term liabilities, as well as reduced commercial support and ongoing inflationary pressures.
Revenue was also affected by the suspension of flights to Dubai and Tel Aviv. airBaltic remains consequently under liquidity pressure.
Management has engaged external financial advisors to develop a new strategic business plan and evaluate potential alternatives for the airline. The company said it is actively discussing long-term solutions with stakeholders, including the Latvian government, while maintaining its commitment to uninterrupted operations.
