The Latvian government said that the financial situation of the country’s national airline, airBaltic, was “very serious,” LSM reports. Earlier, S&P Global Ratings lowered airBaltic’s credit rating from CCC+ to CCC- with a negative outlook, LRT reported. The agency noted that airBaltic’s had insufficient funds to cover its financial obligations and the government may not bail out the company. S&P said that the airline may need EUR 120-170mn of additional capital to continue operations. Meanwhile, airBaltic is seeking changes to the terms of bonds due in August 2029. The company asked bondholders for permission to secure EUR 225mn in interim financing for immediate liquidity needs, Investing.com reported. However, a meeting of bondholders was postponed to 17 August 2026 due to lack of quorum, LSM reported.
Latvian Prime Minister Andris Kulbergs blamed former transport minister Kaspars Briskens of the opposition Progressives for airBaltic’s current state. He said that the government’s goal was a financially viable airBaltic. However, the air carrier’s “strategic importance cannot mean unconditional state funding,” he added, insisting that the company must “live off its own business, not on future state funding.” The airline’s revised business plan proposes seeking up to EUR 225mn of new debt financing and EUR 100mn of new equity capital, Baltic News reports. The plan would cut airBaltic’s fleet of Airbus A220-300 aircraft from 54 to 36 by the end of 2026. The fleet would then expand to 40 aircraft by 2031. Also, airBaltic would strengthen its ACMI partnerships and focus on flights from Latvia’s Riga International Airport.