airBaltic Files for Chapter 11, Secures €350 Million DIP Financing

airBaltic has initiated a Chapter 11 financial restructuring in the United States and secured a commitment for €350 million of debtor-in-possession financing as the Latvian carrier seeks to reduce its obligations and establish a more sustainable capital structure.

Air Baltic Corporation and certain subsidiaries voluntarily filed proceedings with the U.S. Bankruptcy Court for the Southern District of New York. The airline will continue operating during the court-supervised process, with flights, ticket sales, reservations and customer services continuing normally.

Strategic Value Partners arranged the €350 million DIP facility, with funding from Barclays, Hayfin Capital Management, Morgan Stanley, Oaktree Capital Management and Strategic Value Partners. The financing carries an interest rate of SOFR plus 8%, equivalent to approximately 12% at current rates, and remains subject to court approval.

The new capital, together with cash generated by the airline’s operations, is expected to provide liquidity throughout the restructuring. Chapter 11 will give airBaltic a framework to negotiate with creditors, aircraft lessors and other stakeholders while maintaining operations.

The filing follows airBaltic’s recent efforts to strengthen its balance sheet and secure additional financing while implementing a revised business plan. The restructuring is intended to substantially reduce financial obligations, improve the airline’s cost structure and provide a stronger platform for its continuing operations.

airBaltic’s existing Management Board and Supervisory Board will remain in place during the proceedings. The airline said it intends to continue meeting obligations to suppliers, service providers and other partners in the ordinary course of business.

The carrier said passengers do not need to take any action as a result of the filing, with existing tickets, reservations, vouchers and credits remaining valid.