airBaltic Follows the SAS Path Into Chapter 11

airBaltic opened a voluntary Chapter 11 case in New York on September 14, 2026, and a judge let it draw €140 million two days later from a €350 million ($406 million) rescue loan.

Flights, tickets and customer service stay in place. The people who should watch the docket are the Latvian state, which holds 88.37%, Lufthansa Group with 10%, the lessors of 54 Airbus A220-300s, and holders of the 14.5% notes due 2029. The carrier picked the same U.S. court SAS used in 2022, and it is being run by the man who was SAS’s group chief financial officer through that case.

A New York Court Now Runs a Baltic Flag Carrier

Air Baltic Corporation AS, with training unit Air Baltic Training and cargo handler Baltijas Kravu Centrs, filed in the U.S. Bankruptcy Court for the Southern District of New York as case 26-12188. The airline said it chose that forum because its debts, leases and other obligations are international, and because other carriers, including SAS, United, Delta, GOL and American, have used the same statute while they kept flying.

Strategic Value Partners arranged the new money. Barclays, Hayfin Capital Management, Morgan Stanley, Oaktree Capital Management and Strategic Value Partners committed to the facility at the Secured Overnight Financing Rate plus 8 percentage points, about 12% a year. The September 16 first-day order released €140 million at once. The other €210 million comes later, still under court control.

Management and the supervisory board remain in place. Chief Executive Erno Hildén told passengers the court case should not show up at the gate.

Our focus is on continuing to run the airline while implementing the changes set out in our new business plan. For our passengers, our operations continue as normal, the process does not affect their travel experience and is not noticeable to them, we are flying, selling tickets and planning our future schedule, with the same focus on safety and operational reliability.

Erno Hildén, President and CEO, airBaltic

The same message went out on the airline’s official account the morning of the filing.

We've taken an important step to strengthen our financial position, supporting our broader plan to build a more efficient and stronger airline for the future. As part of this, the company has voluntarily initiated a Chapter 11 financial reorganisation in the United States – a… pic.twitter.com/KisqEDmkSZ

— airBaltic (@airBaltic) September 14, 2026

That passenger line is doing a lot of work. Chapter 11 is built so the flying schedule can continue while lessors, bondholders and owners get pulled into a U.S. timetable. The airline expects the case to run until around June 2027, about nine months from the petition date.

HOW THE FILING CAME TOGETHER

1. April 2026: Latvia extends a €30 million emergency loan after a liquidity scare, with repayment due by the end of August.
2. August 2026: airBaltic scraps the old 100-jet growth plan and says the A220 fleet will fall to about 36 aircraft by year-end.
3. September 12, 2026: after Latvian cabinet, board and shareholder approvals, the company signs the €350 million debtor-in-possession commitment and cancels a September 15 bondholder meeting.
4. September 14, 2026: the petition is filed in New York; tickets, refunds, vouchers and loyalty credits stay valid.
5. September 16, 2026: the court approves first-day relief and the first €140 million draw. Some 2029 bondholders, including Klirmark Capital, had already objected to the loan’s seniority.

Prime Minister Andris Kulbergs said the U.S. route followed a bondholder turn toward liquidation and called Chapter 11 one of the best options for keeping the airline viable. He also said the €30 million spring loan had run out in June, and that by April the carrier had burned through the €380 million raised on the 2024 bonds. The state, he added, is still looking for a strategic investor.

WHAT HOLDERS OF TICKETS KEEP

• The schedule: Booked flights keep operating and new tickets remain on sale under the existing timetable.
• The ticket: Reservations, refunds, vouchers and customer credits stay valid under current policies, and the airline says no passenger action is required.
• The rights: EU delayed-and-cancelled-flight rules still apply to airBaltic services; a smaller 2027 map is a later planning issue, not a voided boarding pass this month.

The quieter shift is already in the business plan the court case is meant to fund. That plan cuts flying from Tallinn and Vilnius and pulls capacity back to Riga. Anyone holding a seat this month is not the target. Anyone who depends on those secondary bases next summer is.

The SAS Playbook Arrives in Riga

Hildén named chief executive in December 2025 after serving until June 2025 as executive vice president and group chief financial officer at SAS. At a press conference on the filing he said airBaltic is “targeting (the) same process.” Kulbergs said the carrier is walking the path SAS recently finished, with the same consultants.

SAS filed in the same New York court on July 5, 2022, after a failed out-of-court attempt, and first said the case would take nine to 12 months. The plan went effective on August 27, 2024, about 25 months later. Exit money totaled $1.2 billion. Castlelake took about 32% of the new equity, the Danish state about 25.8%, and Air France-KLM 19.9%, with a path for the French-Dutch group to seek control later. Sweden and Norway dropped out as owners. More than 250,000 old shareholders were wiped when SAS common shares were cancelled.

TWO CHAPTER 11 CASES

Aviation consultant John Strickland said the U.S. statute gives the airline “a protective framework to put their house in order” and that he did not see why airBaltic would not do the same as SAS. Yves Schwyter of Vectus Intelligence called the court path a probably more sustainable capital structure than the 25% bond deal that was on the table a week earlier.

SAS also kept flying, selling tickets and talking as if the brand were intact. The ownership chart that came out the other side was new. airBaltic’s first-day papers say the current boards stay. That is how these cases open. It is not how they have to close.

Who Still Owns airBaltic After Chapter 11?

The cap table on the petition date is the Latvian state at 88.37%, Deutsche Lufthansa AG at 10%, and Aircraft Leasing 1, the vehicle of Danish businessman Lars Thuesen, at 1.62%. Lufthansa paid €14 million for a convertible instrument with about 10% of the voting rights. That deal closed on August 21, 2025, next to a matching €14 million from Riga, and it was written around a planned IPO in which Lufthansa’s stake would not fall below 5%.

That IPO, aimed at Nasdaq Riga and the Frankfurt Stock Exchange and once described as a primary raise of about €250 million, did not arrive in time. Court papers say European airline prices and the carrier’s own numbers could not support the valuation. Chapter 11 does not automatically cancel those shares on day one, but the SAS exit is the working precedent hanging over every existing holder, including the ministry that has already put public money in more than once.

After Covid shut the network, Brussels cleared a €250 million pandemic recapitalization in 2020. Latvia added about €90 million across 2021 and 2022, lifting the state’s holding to 97.97% before the Lufthansa issue. Kulbergs has said the state’s share should fall toward a minimum and that the government should not be in this business. He also said the new loan means Riga does not have to put fresh cash in beside the DIP lenders. That is a statement about this draw, not about whatever equity has to be issued to get out of court.

Lufthansa is on both sides of the table. It is a 10% holder, and it is the main customer for airBaltic’s wet-lease business, which put A220s and crews onto Lufthansa, SWISS, Austrian and Brussels Airlines flying. In 2024 the group extended its wet-lease partnership for three years beyond summer 2025, with room for up to 21 of the Latvian jets in summer and five in winter. ACMI work brought in about €157 million in 2025, roughly 20.3% of revenue. Hildén said the biggest operating change inside the court case would be a smaller wet-lease book. A 10% stake and a 21-jet contract are not the same interest, and they will not be treated as one claim.

One Engine Type Grounded the Growth Plan

airBaltic flies only the A220-300 and has done so since 2020, when it became Europe’s largest operator of the type and, earlier, the launch customer for what was then the Bombardier CS300. Every jet uses Pratt & Whitney’s PW1500G, the only engine certified for the aircraft. None of the 54 jets is owned by the debtor. Forty-six airframes sit on operating leases of about 12 years, and eight jets plus seven spare engines and a simulator sit on finance leases.

That commonality was the point of the old plan, which pointed toward 100 A220s. It also meant a single engine campaign could park a third of the flying. Pratt & Whitney disclosed a rare powder-metal condition in July 2023. airBaltic then ran with an average of 8.0 jets on the ground in summer 2024 and 7.7 in summer 2025. Groundings averaged 13 aircraft in the first quarter of 2025, and in January 2025 the company said it would cancel 4,670 flights for that summer.

THE GROUNDED-FLEET TALLY

• Q1 2025: An average of 13 A220s sat idle for engine work, and ACMI cover had to be bought in to hold the schedule.
• Q1 2026: The airline said no aircraft were grounded for Pratt & Whitney issues, a reversal it had not been able to claim for years.
• The leftover bill: Pratt & Whitney is the largest unsecured creditor, at $66.5 million, and $106.7 million of extra engines is still on the order book to be deferred or cut.
• The growth that is coming off: Forty firm A220-300s remain on order at an aggregate list price of about $3.5 billion; the filing says those deliveries, already deferred past 2026, are to be cancelled or parked indefinitely.

The engines are no longer the daily operations story. They are the reason the balance sheet arrived in New York after the flying had already been patched. On top of that sat the loss of Russia and Ukraine flying, unhedged jet fuel during the Iran war, and a first-quarter 2026 net loss of €70 million. Full-year 2025 still produced a record 5.2 million airBaltic passengers and €779.3 million of revenue, with the net loss narrowed to €44.3 million from €118.2 million. Demand was not the hole. Cash and lease load were. Unrestricted cash in the first-quarter accounts was thin enough that a €30 million state loan became the bridge to summer, and then that bridge ended.

The revised plan targets about 36 A220s by the end of 2026, 18 fewer than today, then about 40 in 2031. Hildén has put a €44 million annual profit-improvement number on the work. Returning 18 leased jets only works if lessors take them back or re-cut the rent. That is the bargaining Chapter 11 is for.

Tallinn and Vilnius Lose Destinations First

The August plan already said Riga would take priority. For summer 2027, which runs from late March through October, the carrier intends to serve 57 destinations from Riga, 13 from Tallinn and eight from Vilnius. Tallinn’s list shrinks from 24 destinations, a cut of 11. Vilnius becomes a thin point-to-point outpost. Frequencies on a few established Riga routes are supposed to rise as the edges of the map come off.

Court papers describe airBaltic as the only Baltic airline with substantial transfer traffic through Riga and put its combined seat share at the three capital airports at about 40%. That share is the public-policy reason Latvia has kept writing checks. It is also the share that gets harder to defend if Tallinn and Vilnius turn into spoke remnants while the legal fight over 18 airframes runs in New York.

About 3,000 people work at the group, 93% of them in Latvia, with 198 staff in Estonia and Lithuania. The filing does not publish a headcount target. A fleet that is one-third smaller does not keep the same crew roster, and the wet-lease cut Hildén flagged is where flying jobs move first, because those jets were earning for other airlines’ schedules.

Passengers with current tickets are not being asked to rebook. The 2027 timetable is the document that will show whether “not noticeable” still applies once the 36-jet airline exists. For travelers in Estonia and Lithuania, that is the page to watch, not the first-day order.

A €350 Million Loan Jumps the Creditor Line

The DIP loan is larger and cheaper on its headline rate than the €257 million super-senior package, priced at 25%, that bondholders were being asked to approve days earlier. It is still expensive money, and it sits ahead of almost everyone who was already on the books. Funded debt is about $583 million. The 14.5% bonds due 2029 account for €380 million of that stack. Operating leases are a separate, larger pile.

WHO PUT UP THE NEW MONEY

• The arranger: Strategic Value Partners ran the auction after an ad hoc bondholder group’s out-of-court idea failed to cover liquidity once fuel prices jumped again in late summer.
• The lenders: Barclays, Hayfin Capital Management, Morgan Stanley, Oaktree Capital Management and Strategic Value Partners signed the commitment on September 12.
• The priority: The facility is a superpriority senior secured term loan, which is why 2029 holders filed a limited objection before the first-day hearing.
• The calendar cost: Coupons on the old bonds are in the U.S. process now; that is the point of the stay, and it is why some retail buyers of the 2029 notes are already asking when interest resumes.

The top unsecured list reads like a map of the airline’s public life. Pratt & Whitney is first, at $66.5 million. Next is about $42.4 million of European Union emissions-trading allowances, which operators must surrender by September 30, 2026. Latvian state bodies sit further down that queue, including the Ministry of Transport, the State Revenue Service and Riga Airport. The government is a controlling shareholder and a creditor at the same time. Those roles conflict the moment a plan of reorganization has to say who gets cash, who gets new paper, and who gets nothing.

Advisors on the case include Seabury Securities and Milbank. The stated aims are the new loan, handing back surplus jets, re-cutting remaining leases, dealing with Airbus and Pratt & Whitney on the undelivered metal, and lining up exit debt and equity. Until that plan is filed and confirmed, the €350 million is a stay of execution with an interest bill, not a finished recapitalization. Grant Thornton Baltic partner Raitis Logins described the move as another attempt to buy time. That is a fair reading of a nine-month clock on a job SAS took 25 months to finish.

Ryanair Bids for the Seats Being Dropped

On September 17, a day after the New York first-day order, Ryanair said it wants to double traffic in the Baltic region over five years. The proposal, which the airline put at $1.6 billion, would take locally based jets from seven to 16 and annual seats across Latvia, Estonia and Lithuania to 11 million by 2031. Chief Commercial Officer Jason McGuinness tied the pitch to airBaltic shrinking its fleet by one-third. The same statement said winter capacity in Lithuania and Estonia will fall 25% unless airport charges come down, with that flying sent to Slovakia, Poland, Italy and Sweden.

The offer is conditional. It is also the first public grab at the holes a 36-jet airBaltic will leave. Low-cost seats can replace some leisure frequencies. They do not automatically replace a Riga connecting bank, an ACMI reserve for Lufthansa, or a state-owned carrier that still holds about 40% of the three-capital seat market. Estonian pushback on that point showed up as soon as the Ryanair figures did: a cheaper network is not the same product as the flag carrier’s hub.

airBaltic can keep boarding passengers while that argument runs. The SAS case says the harder questions land later, when leases are reset, the 40-jet Airbus backlog is killed or deferred, and someone has to put new equity under an airline that today belongs 88.37% to Latvia and 10% to Lufthansa. June 2027 is the date the company put on that work. SAS put a shorter date on it too, then spent 25 months in court before the old shares were worth zero.

Disclaimer: This article is news reporting and analysis of airBaltic’s court-supervised restructuring and related network plans. It is for information only and is not investment, legal, or travel-booking advice, and it is not a recommendation to buy, hold, or sell airBaltic tickets, bonds, or any other claim on the company. Readers who hold tickets, loyalty credits, or securities, or who must travel on affected routes, should confirm their position with the airline, a licensed insolvency or securities lawyer, and, where relevant, a qualified financial adviser before acting. Figures, court statuses, schedules and financing terms are those published by the company, the court record and named officials as of the article’s date and can change as the Chapter 11 case proceeds.