airBaltic, together with certain subsidiaries, has filed for proceedings under Chapter 11 of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court for the Southern District of New York.
The filing is intended to restructure its finances, and flight operations will continue. Airline tickets will remain valid, while refunds, vouchers, and credits for baggage and services will continue to be handled in accordance with existing policies.
In connection with the proceedings, the company has secured commitments for debtor-in-possession (DIP) financing. The financing was arranged by Strategic Value Partners and funded by Barclays, Hayfin Capital Management, Morgan Stanley, Oaktree Capital Management, and Strategic Value Partners. The facility totals €350 million and carries an interest rate of the Secured Overnight Financing Rate (SOFR) plus 8%.
The court approved the first-day motions and also granted interim approval for the DIP financing. This provides immediate access to the initial €140 million of the €350 million facility. The approval also allows the company to continue operations; pay employee wages; honor existing reservations, tickets, vouchers, refunds, and mileage; make certain payments to key suppliers and travel agency partners; pay for goods and services delivered on or after September 14 under ordinary terms; and pay taxes, insurance premiums, and regulatory expenses.
Andreis Martinovs, Chairman of airBaltic’s Supervisory Board, commented, “Under court supervision, we will receive a clear framework and timetable for reaching agreements with creditors, including aircraft leasing companies, and other stakeholders, while being protected from creditor claims.” Erno Hilden, President and Chief Executive Officer (CEO), said, “For passengers, operations will continue as usual, and these proceedings will not affect their travel experience.”
The current management team and Supervisory Board will remain in place. The proceedings are expected to be completed around June 2027.
