by Lacey Pfalz
Last updated: 8:40 AM ET, Mon September 14, 2026
Small European air carrier airBaltic, majority-owned by the Latvian government, filed for Chapter 11 bankruptcy in New York this week, becoming another economic casualty of the U.S. war with Iran.
According to Reuters, the small airline, which has about 50 Airbus A220-300 planes, is seeking around $405 million in financing from major lenders like Strategic Value Partners, Barclays, Hayfin Capital Management, Morgan Stanley and Oaktree Capital Management to continue operations as usual during its bankruptcy proceedings.
"airBaltic has been experiencing acute financial stress due to a combination of financial and geopolitical factors," the airline’s board explained to the bankruptcy court.
Jet fuel prices have doubled, which had been the proverbial straw that broke the camel’s back with Spirit Airlines earlier this year.
The smallest airlines, or those struggling with profitability, have been most affected by these prices. British low-cost carrier EasyJet is considering having Castlelake, a major U.S. private equity firm, buy it to keep it afloat. AirAsia is also looking for new investors.
"In the coming months we will engage with all our stakeholders to agree on sustainable terms," said airBaltic’s CEO, Erno Hilden.
The court proceedings and restructuring are expected to continue through June 2027. Throughout this process, operations, such as a normal flight schedule, will continue.
Lufthansa holds a 10% minority stake in the airline. airBaltic operates many of its flights between Riga, the Latvian capital, and destinations across Europe and the Middle East.
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