The Latvian government is in talks with a strategic investor for the country’s ailing national airline, airBaltic, Prime Minister Andris Kulbergs revealed, Reuters reported. He said that the potential investor was “a serious partner,” but refused to indicate what stake the investor could acquire. The state’s main condition was that the investor maintain airBaltic’s hub at Latvia’s Riga International Airport, Kulbergs said. He described the airline’s current plan to increase its fleet to 100 aircraft and serve 10 million passengers annually as overly ambitious, LETA reported. The fleet now has 54 aircraft, according to LSM. Transport Minister Rihards Kozlovskis said that airBaltic’s new business plan would no longer focus on global growth, LETA reported.
Reuters reported that airBaltic is due to present a new business plan and seek interim financing from bondholders. Earlier, the government granted a EUR 30mn short-term emergency loan to the company, which will be due in August 2026. Meanwhile, international credit rating agency Fitch Ratings has placed airBaltic’s long-term issuer default rating of CCC- and its secured bonds on negative rating watch, warning of possible default, LETA reported. Uldis Rutkaste, head of the monetary policy department at the Bank of Latvia, estimated that airBaltic could need up to EUR 150mn of funding by the end of 2026, LSM reported. Kulbergs insisted that the company would not receive state support without “a clear vision” and “ironclad plans.”