The United States Bankruptcy Court has given its approval to the request for precautionary measures filed by airBaltic, which includes immediate access to a first tranche of 140 million euros from a total financing line of 350 million euros, as well as the continuity of its operations, after voluntarily seeking protection under Chapter 11 of U.S. bankruptcy law.
According to the Latvian airline in a statement, this liquidity injection, combined with the cash it continues to generate from its daily activity, will serve to sustain operations and support its restructuring process during the reorganization under Chapter 11.
"The approval of our financing provides us with greater financial stability while we work to build a stronger and more sustainable airBaltic," valued the company's president and CEO, Erno Hildén.
Furthermore, the judicial decision in the United States empowers airBaltic to pay the salaries and benefits of its staff, maintain the validity of already made reservations, as well as coupons, refunds, and customer loyalty points, and meet commitments with strategic suppliers, travel agencies, and distribution partners.
Following the granting of this first precautionary measure and the provisional authorization to access DIP financing, the airline will continue with its financial reorganization under the supervision of the U.S. Court and in dialogue with creditors and other involved parties, with the goal of configuring a more sustainable capital structure and a competitive cost base.
Hit by the war in the Middle East, the slowdown in demand, and the availability issues of Pratt & Whitney engines, airBaltic announced this Monday its entry into this procedure to reorganize its financial commitments without interrupting its operations.
At the same time, the company is developing a new roadmap that includes, among other objectives, the adjustment of its current fleet of 54 Airbus A220-300 and the concentration of its network in Riga (Latvia).
In this way, it plans to operate around 36 Airbus A220-300 by the end of 2026, which means reducing the current 54 aircraft by one third, and then gradually increasing the number of units to around 40 by 2031.
In the first quarter of the fiscal year, the airline doubled its losses to 70 million euros due to the impact of the conflict in the East, while its revenues improved by 12.3%, reaching 149 million euros, and the number of passengers grew by 5%.