A hearing in the US Bankruptcy Court for the Southern District of New York on Monday, 19 October, will decide on granting the remaining €35 million of the first debtor-in-possession (DIP) financing tranche to Latvia’s national airline airBaltic, according to a court notice reported by TVNET/LETA.
Two sessions are planned. At 17:00 Latvian time a regular hearing is expected to take up matters arising in the restructuring, including creditor objections, deadline extensions, contract approvals and other procedural questions. At 18:00 Latvian time the court is due to hold the final hearing on the new DIP financing. If needed, the session will continue on 20 October at 20:00 Latvian time.
Among the items set for Monday is airBaltic’s request that the US court approve the hiring of the Seabury financial advisory group, with a monthly fee of €250,000 and success fees for raising financing and other restructuring transactions.
An interim court order states that the first DIP portion will be €175 million of a planned €350 million in total. airBaltic has already received €140 million, and the remaining €35 million would follow a final order. The hearing is also expected to confirm a funding structure of up to €350 million. Access to further portions of €125 million and €50 million would depend on additional court decisions and on meeting restructuring conditions.
TVNET has reported that airBaltic began restructuring its financial obligations under the US Chapter 11 procedure. The airline has received a binding commitment from financiers to provide up to €350 million in new DIP funding to support liquidity and operations during the process. Of the first €140 million already received, €78.925 million is to be used to buy out eight aircraft and seven engines.
The financing was arranged by SVP, and Barclays, Hayfin Capital Management, Morgan Stanley, Oaktree Capital Management and Strategic Value Partners have committed to provide it. The interest rate is SOFR plus 8%, currently about 12%, with additional fees of up to €52.5 million in this process. An earlier plan to raise up to €257 million from bondholders at a 25% annual rate will not be carried out. At the same time, a bondholder group, the Ad Hoc Group, has filed court objections to the DIP terms and to their possible effect on bondholder security.
Chapter 11 protects airBaltic from creditor claims until the restructuring of its obligations is complete. The company says flights and customer service will continue as usual. All flights are to operate according to the planned programme, existing tickets and bookings remain valid, and passengers can continue to buy tickets and travel with airBaltic.
The outcome of the process is to be a reorganisation plan that the court must approve. The process could end in mid-2027.
Bondholders in August backed capitalising the two nearest interest payments, due on 14 August and 14 November this year, by adding them to the principal instead of paying them in cash. They also approved a temporary waiver of minimum liquidity requirements until November 2026, and other measures intended to give the airline more flexibility in carrying out its revised business plan.
Last year the airBaltic group’s turnover rose by 4.2% compared with 2024, to €779.344 million. The group’s loss was €44.337 million, 2.7 times smaller than in 2024. In 2025 the airline carried 5.2 million passengers, 1% more than in 2024.
Last summer Germany’s national airline Lufthansa became an airBaltic shareholder. The Latvian state now owns 88.37% of the shares, Lufthansa 10%, Aircraft Leasing 1, a company of Danish entrepreneur Lars Thuesen, 1.62%, and other holders 0.01%. The company’s share capital is €41.819 million.