Report, photo copyright by : Gan Yung Chyan, KUCINTA SETIA
According to Reuters, Latvia's airBaltic announced on 14 September 2026 (Monday) that it had voluntarily filed for Chapter 11 bankruptcy protection in New York as part of a restructuring effort to reduce debt.
In a statement, airBaltic said it had secured commitments for €350 million ($405 million) in financing from lenders—including Strategic Value Partners, Barclays, Hayfin Capital Management, Morgan Stanley, and Oaktree Capital Management—to support operations during the restructuring process.
The war between the U.S. and Iran has caused jet fuel prices to double, triggering the worst crisis for the air travel industry since the covid pandemic.
For months, investors and airline executives have warned that carriers with strained balance sheets and high exposure to oil price volatility would be hit hardest by the Middle East conflict.
The Latvian government holds a majority stake in airBaltic.
The company stated that the decision to file for bankruptcy was intended to secure protection while negotiating debt restructuring with creditors.
AirBaltic also noted that flights would continue to operate as usual during the court-supervised bankruptcy proceedings.
AirBaltic is the second airline casualty linked to this war, following the collapse of U.S.-based Spirit Airlines in May 2026.
The airline had already been facing financial pressure—which prompted the Latvian government to provide a €30 million loan in April—and its liquidity position has deteriorated further in recent months due to rising fuel costs.
Separately, other airlines—such as AirAsia, Southeast Asia's largest low-cost carrier—are also seeking new capital as they face mounting financial pressure from rising jet fuel costs and massive foreign exchange losses.
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