Image: Romain COUPY · CC BY-SA 4.0 · via Wikimedia Commons
airBaltic Announces Fleet Reduction and Financial Restructuring to Enhance Profitability
Latvian carrier airBaltic plans to shrink its Airbus A220-300 fleet to 36 units by 2026 while securing substantial financing to strengthen its balance sheet and improve leverage.
The gist
airBaltic will downsize its A220 fleet and pursue new financing to boost profitability and reduce debt by 2031.
airBaltic has unveiled a comprehensive restructuring initiative aimed at reinforcing its financial position amid a challenging global aviation market. Central to the plan is a significant reduction of its Airbus A220-300 fleet from the current 54 aircraft to approximately 36 by the end of 2026. This readjustment marks a notable departure from earlier ambitions targeting a nearly 100-aircraft fleet, reflecting a strategic recalibration to align capacity with demand and operational efficiency.
The Latvian airline intends to gradually rebuild the A220 contingent to around 40 aircraft by 2031, while maintaining the Riga hub as the core of its operations. Despite the smaller fleet size, airBaltic projects that overall scheduled capacity will remain broadly stable over the long term. This will be achieved through enhanced aircraft utilization rates, a network planned more responsively to market demand, and expanded aircraft, crew, maintenance, and insurance (ACMI) partnerships that operate year-round to maximize asset productivity.
Financially, airBaltic is targeting roughly €45 million in recurring annual benefits stemming from cost-containment measures and new revenue streams. The airline forecasts revenues to grow from €779 million in 2025 to about €800 million in 2027, eventually reaching close to €1 billion by 2031. Earnings before interest, taxes, depreciation, amortization, and rent (EBITDAR) are expected to rise to approximately €300 million in 2031, signaling a significant improvement in operating profitability under the new plan.
To support its liquidity needs during the transition, airBaltic is seeking €225 million in interim financing. The long-term recapitalization strategy will involve raising up to €225 million in new debt and €100 million in new equity, totaling €325 million. Additionally, the airline proposes converting a portion of its 2029 Senior Secured Notes into equity, with the remainder replaced by up to €125 million of reduced debt. These financial maneuvers require approvals from bondholders and other stakeholders before implementation.
The restructuring plan is designed not only to shore up the airline’s balance sheet but also to markedly improve its leverage profile. Net leverage ratios, currently projected at 8.94 times in 2025, are expected to decline to around 4.8 times following the recapitalization by the end of 2026. Further deleveraging is anticipated, with net leverage potentially falling to approximately 1.6 times by 2031, indicating a much stronger and more sustainable financial footing.
Several external factors have driven airBaltic’s revised strategy. Weaker global demand patterns, slower-than-expected revenue growth, ongoing geopolitical uncertainties, and persistent constraints on Pratt & Whitney engine availability have necessitated a more prudent approach. Despite these headwinds, the airline emphasizes that regular flight operations and passenger bookings continue uninterrupted through this period of transformation.
The airline’s focus highlights the operational benefits of a leaner yet more intensively utilized fleet combined with strategic financial restructuring. The plan aims to establish greater resilience against market volatility and operational challenges in the medium term. Maintaining Riga as the operational hub ensures continuity while allowing airBaltic to adapt its network and capacity to evolving market needs efficiently.
By balancing capacity reduction with improved utilization and expanding ACMI partnerships, airBaltic seeks to stabilize and eventually grow its business profitably. The outlined capital strengthening measures and debt restructuring represent a crucial foundation to achieving these goals and enhancing shareholder value. Updates on financing progress and detailed plan execution will emerge as regulatory approvals and stakeholder consents are secured, shaping the airline’s trajectory to 2031.
Frequently asked questions
- How many Airbus A220-300 aircraft does airBaltic plan to operate by 2026?
- airBaltic plans to operate about 36 Airbus A220-300 aircraft by the end of 2026, down from its current fleet of 54.
- What financial measures is airBaltic taking as part of its restructuring?
- airBaltic is seeking €225 million in interim financing and plans a recapitalization involving up to €225 million in new debt and €100 million in new equity, plus converting some 2029 notes into equity and reducing other debt.
- What factors prompted airBaltic to revise its business plan?
- The revised plan reflects weaker demand, slower revenue growth, ongoing geopolitical uncertainty, and constraints on Pratt & Whitney engine availability.
Read more
All Sustainability →
Air Baltic to scale back A220 fleet to around 40 aircraft in strategic overhaul
Latvian carrier envisages a long-term fleet of around 40 A220-300s as it works on €225m interim recapitalisation. Air Baltic is to cut its fleet to around 40 Airbus A220-300s under a new long-term strategic plan, supported by moves for an initial interim €225 million ($260 million) recapitalisation. The Latvian carrier operates a fleet of 54 A220s but, under the plan announced today, expects this to fall to 36 by the end of the year and to stand at 41 by 2031. Under the carrier's previous business plan, developed in line with an anticipated IPO, Air Baltic envisaged expansion towards a 100-strong aircraft fleet off the back of “sustained growth” in passenger volumes and ticket revenue across the Baltic region and wider European markets. "Since then, the operating environment has changed materially," the carrier says, citing moderated demand and revenue growth, geopolitical events in the Ukraine and the Middle East and the Pratt & Whitney GTF engine issues which have restricted the carrier's ability to deploy its full fleet. "The revised business plan responds to these developments with a deliberate shift in priorities: financial stability first, growth second,” the carrier says. “It aligns Air Baltic's network, fleet, cost base and capital structure with current market conditions." Earlier this year Air Baltic secured consent from the country's parliament for a short-term state loan of €30 million to prop up its liquidity. The carrier’s medium-term strategy had centred on an IPO to raise capital, but market conditions and the company's financial position left the timing and feasibility of such a venture uncertain. Air Baltic chief executive Erno Hilden, who took the helm in December last year, says: "Every successful airline must continuously adapt to a changing market. Thus, this business plan is about making disciplined choices that strengthen Air Baltic's long-term competitiveness while preserving what matters most – reliable connectivity and operations, together with financial sustainability." Air Baltic's revamped business plans will focus on its Riga hub, but rather than "pursuing broad expansion”, will add depth and frequency on existing routes where demand and profitability are strongest. This will be supplemented by selected point-to-point services and seasonal flying to improve fleet utilisation. While the carrier envisages scheduled capacity initially falling, it sees this surpassing current levels by 2031, reflecting what it terms "a more focused network strategy". The carrier aims to strengthen its commercial partnerships with ACMI customers as part of efforts to boost its profitability. Air Baltic is targeting €45 million in recurring annual benefits from the measures, predominantly generated through cost savings. The carrier's plan also includes measures to recapitalise. It aims to address its near-term liquidity requirements through €225 million of interim financing. "The interim financing is intended to bridge the company to a permanent financing solution and remains contingent on the required bondholder resolutions and other approvals," it says. The carrier's proposed permanent financing package comprises up to €225 million of new debt financing and €100 million of new equity capital. Air Baltic expects to post revenues of around €800 million this year, rising to €1 billion by 2031. The plan envisages its EBITDAR to reach €192 million next year and €300 million in 2031.
Massive Colombia earthquake disrupts flights; major airports sustain damage
Social media videos showed damaged ceilings and broken windows at an airport in Pereira. A massive earthquake that hit Colombia on 10 August impacted several major airports in the region, causing flight cancellations. Videos on social media show major damage at Matecana airport in Pereira, near the earthquake's epicentre. Large portions of the airport's ceiling and windows appeared to have broken, leaving debris strewn across the terminal interior. The airport sees about two-dozen flights per day, most of which are cancelled into Tuesday and beyond, FlightRadar24 data show. Operations were also suspended at airports in Manizales, Armenia, Cartago, and Buenaventura, Colombia's aviation authority said Monday, pending inspections of facilities and control towers for damage. Some had begun to reopen by Tuesday morning, local time. Seventy-eight flights were cancelled at El Dorado airport in Bogota on Monday, according to FlightAware, and another 312 were delayed. Alfonso Bonilla Aragon airport in Cali reopened late Monday local time after a power outage, authorities say, which resulted in about 40 flights being cancelled. Jose Maria Cordova airport in Medellin says it is operating normally on Tuesday after being evacuated on Monday. Sixteen flights were cancelled into and out of the airport on Monday. In Popayan, south of the most impacted area, flights at Guillermo León Valencia airport were restricted due to emissions from the Purace volcano, adding further complication to the nation's airspace. The 7.4-magnitude quake struck about 200 miles west of the country's capital of Bogota. More than 180 people had been confirmed dead by Colombian authorities in their latest update Tuesday morning local time, as reported by local paper El Tiempo . Avianca says passengers with tickets for flights on Monday could reschedule for up to 15 days with no penalties. "We continue to monitor the evolving situation and traveller demand to adjust our operations and implemented measures according to the country’s connectivity needs," says Avianca.
American Airlines completes first US passenger flight powered by non-biobased sustainable aviation fuel
American Airlines flew the first U.S. commercial passenger flight last week using sustainable aviation fuel made without biobased feedstocks. The airline said the flight operated from Corpus Christi to Dallas-Fort Worth. Fuel producer Infinium produced the electro sustainable aviation fuel, or eSAF, at its Pathfinder facility in Corpus Christi. The company makes the fuel using waste carbon dioxide and renewable electricity rather than plant- or animal-derived feedstocks. Although American did not identify the aircraft used for the flight, Envoy Air typically operates Embraer E175s between Corpus Christi and DFW for American Eagle. Fuel Entered Existing Airport System Infinium blended the eSAF with conventional jet fuel before delivering it to the common fuel tanks at Corpus Christi International Airport. The fuel was then allocated to the American flight to Dallas-Fort Worth. American said the process demonstrated that eSAF can move through existing aviation fuel infrastructure. "This flight represents a significant moment for aviation," American Airlines CEO Robert Isom said in a company statement. "Through our partnership with Infinium, we’re demonstrating how next generation technologies like eSAF can move from early investment to real-world application." Larger Production Project Planned Infinium says its Pathfinder facility has produced eFuels since 2023. American has also agreed to purchase commercial volumes of eSAF from Infinium's planned Project Roadrunner facility in West Texas. Infinium expects Project Roadrunner to begin producing and delivering eSAF in 2027. The company says the facility will produce more than 5 million gallons annually once it reaches full capacity.
American Airlines Flies US First with Electro Sustainable Aviation Fuel at Corpus Christi
American Airlines has used electro sustainable aviation fuel on a commercial passenger flight following what the carrier says was the first delivery of non-biobased sustainable aviation fuel (SAF) to a US commercial airport. The eSAF was produced by Infinium at its Pathfinder facility in Corpus Christi, Texas, blended with conventional jet fuel and delivered into the common fuel tanks at Corpus Christi International Airport (CRP). It was then used aboard an American flight from Corpus Christi to Dallas Fort Worth International Airport (DFW). American and Infinium said the delivery marked the first time SAF made without biobased feedstocks had been supplied to a commercial airport in the US. The fuel was tested to meet ASTM specifications for Jet A, allowing it to be used in existing aircraft engines and airport fueling systems without modification. The eSAF was used on an American Eagle Embraer E175 for the Corpus Christi to Dallas/Fort Worth flight. The flight was not powered entirely by eSAF. The synthetic fuel was blended with conventional jet fuel before being delivered to the airport's shared fuel system. Infinium produces the fuel using waste carbon dioxide and renewable electricity rather than biological feedstocks such as used cooking oil or plant material. The company says its eSAF can reduce lifecycle greenhouse gas emissions by more than 90% compared with conventional petroleum-based jet fuel. "Adding eSAF to our product slate, and seeing it power a commercial passenger flight, marks another meaningful step forward in bringing practical, low-carbon fuel solutions to industry," Infinium CEO Robert Schuetzle said. KLM had already used synthetic kerosene on a passenger flight in 2021. American and Infinium say this is the first time synthetic SAF has been delivered through the existing fuel system at a US commercial airport for use on a passenger flight. American has signed an agreement to purchase commercial volumes of eSAF from Infinium's Project Roadrunner plant, which is now under construction. It is expected to begin production and deliveries in 2027 and eventually produce more than 5 million gallons of eSAF annually. "This flight represents a significant moment for aviation," American Airlines CEO Robert Isom said. "Through our partnership with Infinium, we're demonstrating how next generation technologies like eSAF can move from early investment to real-world application." Cost remains one of the biggest obstacles to wider use of synthetic aviation fuel. Isom acknowledged the issue, saying lower SAF prices will be necessary for the technology to be broadly adopted by airlines. SAF accounts for less than 1% of global jet fuel consumption, according to American and Infinium. Aviation consumes nearly 100 billion gallons of jet fuel annually.
The Daily Touch & Go
The day's best aviation news in your inbox. Free, no spam.