airBaltic Unveils Restructuring Plan, Targets Smaller Fleet and EUR 325 Million Recapitalisation

airBaltic has outlined a revised business plan focused on strengthening its balance sheet, reducing its Airbus A220-300 fleet and improving profitability, while maintaining Riga as its primary hub.

The Latvian carrier expects to operate approximately 36 A220-300s by the end of 2026, down from 54 currently, before gradually increasing the fleet to around 40 aircraft by 2031. The airline had previously planned to expand toward a 100-aircraft fleet.

Despite the reduction, airBaltic expects scheduled capacity to remain broadly stable over the longer term through higher aircraft utilisation, a more demand-driven network and expanded year-round ACMI partnerships.

The airline is targeting approximately EUR 45 million in recurring annual benefits from cost reductions and revenue initiatives. Revenue is projected to increase from EUR 779 million in 2025 to approximately EUR 800 million in 2027 and EUR 1 billion by 2031, while EBITDAR is expected to reach approximately EUR 300 million in 2031.

As part of the plan, airBaltic is seeking EUR 225 million in interim financing to address near-term liquidity requirements. A longer-term recapitalisation would include up to EUR 225 million of new debt and EUR 100 million of new equity.

The restructuring also proposes converting a portion of airBaltic’s 2029 Senior Secured Notes into equity, with the remaining portion replaced by up to EUR 125 million of reduced debt. The financing and recapitalisation remain subject to bondholder resolutions and other approvals.

Net leverage is projected to decline from 8.94x in 2025 to approximately 4.8x following the proposed recapitalisation at the end of 2026 and to 1.6x by 2031.

airBaltic said the revised strategy reflects weaker demand and revenue growth, geopolitical uncertainty and continuing Pratt & Whitney engine availability constraints.

The airline continues to operate its normal flight schedule, with existing tickets, bookings and passenger services unaffected by the restructuring plan.