The Latvian government has decided to extend the repayment period on a EUR 30mn emergency loan issued to the country’s national airline, airBaltic, until the end of 2026, LSM reports. The loan was due by the end of August 2026. Also, the government gave conceptual approval to buying an additional EUR 30mn of airBaltic’s bonds and announced readiness for the possible purchase of bridge financing bonds for up to 30mn alongside private investors on identical terms. The government purchased EUR 50mn worth of airBaltic’s bonds in 2024. Meanwhile, the price of the company’s bonds has now dropped to EUR 16,500, which is down 83.5% from EUR 99,750 in the beginning of 2026, LSM reports.
In the meantime, airBaltic is seeking short-term financing from existing bondholders to maintain liquidity amid a search for a new strategic investor, LETA reports. Raitis Logins, managing partner at Grant Thornton Baltic, noted that support from existing bondholders could send a positive signal to investors. He said that the state was making a final attempt to find a strategic investor to save the company. Failure would severely limit the state’s ability to maintain airBaltic’s existing business model and could lead to “serious long-term consequences” for the Latvian economy, Logins warned. He said that there was no basis for continuing the company’s IPO process or discussing the creation of a joint Baltic airline.
Meanwhile, the Latvian Aviation Union (LAA) accused airBaltic of failing to comply with regulatory requirements to consult employee representatives prior to deciding on the company’s new business plan, LETA reported. LAA president Dace Kavasa said that the trade union learned about the business plan from media reports. She pointed out that the new business plan envisaged major reductions in the airline’s fleet and network of routes, which would very likely lead to significant staff cuts. LAA suggested that the airline had assessed scenarios that would include reducing the number of employees by as much as 20-30%. LAA represents employees of six aviation companies in Latvia.