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airBaltic plans major fleet cut to 36 aircraft by end of 2026 amid financial challenges
Latvian carrier airBaltic unveils a new business plan to reduce its Airbus A220 fleet from 54 to 36 planes and refocus its network for long-term sustainability.
The gist
airBaltic will shrink its fleet from 54 to 36 planes by 2026, focusing on profitable routes and year-round wet leasing to survive financial pressures.
Continuing coverage
All European Aviation →Latvia’s national airline, airBaltic, announced a sweeping revision of its long-term business strategy amid ongoing financial struggles. The carrier, which operates an all-Airbus A220-300 fleet, revealed plans to scale back its fleet to just 36 aircraft by the end of 2026, a sharp reduction from its current 54 planes and far below its prior growth ambition of 100 aircraft. This overhaul is designed to stabilize its financial position and sustain reliable connectivity for Latvia and surrounding regions in a highly competitive market.
Under its updated business plan, airBaltic aims to maintain a robust network centered on Latvia, but unlike previous years of aggressive expansion, it will prioritize increasing frequencies on its most profitable routes rather than broadening its reach. The airline expects a slight decline in available seat kilometers from 9.6 billion in 2026 to 8.7 billion in 2027 before gradually expanding to 10.5 billion by 2031, reflecting a deliberate shift to operational discipline and profitability.
A significant aspect of airBaltic’s revenue model has been leasing out aircraft via wet lease agreements, particularly to Lufthansa Group carriers. However, the new strategy will emphasize securing year-round wet lease contracts to mitigate the seasonal fluctuations that previously proved challenging. This move is intended to optimize asset utilization and cushion the airline from the steep demand drops in winter months that strained profitability.
Financially, airBaltic is pursuing 225 million euros in interim financing to support the transition alongside seeking 100 million euros in new capital investment. CEO Erno Hildén characterized the plan as a necessary adaptation to evolving market conditions, aiming for disciplined choices that ensure long-term competitiveness and sustained operations. He emphasized maintaining critical connectivity while fostering financial sustainability through these changes.
Historically, airBaltic’s trajectory was one of steady growth under previous leadership, including former CEO Martin Gauss, who cultivated the airline’s position as a low-cost, full-service hybrid with an all-Airbus A220 fleet. The carrier intended to tap into Northern Europe’s geographic advantages, operating routes connecting the EU and Russia. Yet, the closure of Russian airspace to EU carriers significantly curtailed route options and connecting itineraries, undermining a core component of its growth strategy.
Additions to the operational challenges came from the heavy competition posed by ultra low-cost carriers in the region and a significant rise in fuel prices, particularly affecting Northern European operators. Such cost pressures made it increasingly difficult for airBaltic to compete on narrow regional routes while maintaining a full-service profile. The reliance on seasonal wet leasing arrangements further complicated cash flow, as aircraft had limited utility in off-peak periods, reducing year-round revenue potential.
In January 2025, Lufthansa Group’s minority stake investment in airBaltic underlined the strategic value of the wet lease partnership. Nonetheless, the airline’s current strategy recognizes the necessity of focusing on more predictable, year-round leasing opportunities and concentrating its fleet on routes that sustain profitability. This fleet contraction and network refinement represent a pragmatic approach to surviving a tough operating environment while laying a foundation for measured future expansion.
Overall, airBaltic’s plan marks a sharp pivot from growth to consolidation and efficiency. The downsizing of the fleet, recalibration of network priorities, and revamped wet leasing model demonstrate the airline’s commitment to preserving its core market presence amid external pressures. The company’s trajectory will be closely tied to how successfully it navigates these changes and adapts to dynamic geopolitical and commercial aviation challenges.
Frequently asked questions
- How many aircraft will airBaltic operate by the end of 2026?
- airBaltic plans to reduce its fleet from 54 aircraft to 36 by the end of 2026 as part of its new business plan.
- Why is airBaltic shrinking its fleet and changing its business strategy?
- The airline faced financial difficulties due to rising fuel costs, strong low-cost competition, closure of Russian airspace, and reliance on seasonal wet leasing, prompting a shift toward a smaller, more profitable fleet and year-round wet leasing contracts.
- What role does wet leasing play in airBaltic’s updated plan?
- airBaltic will continue wet leasing aircraft, especially to Lufthansa Group airlines, but will focus on securing year-round wet lease agreements rather than seasonal ones to ensure better utilization and financial stability.
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airBaltic Announces Fleet Reduction and Financial Restructuring to Enhance Profitability
Latvian airline airBaltic has announced a major restructuring plan. The carrier aims to strengthen its balance sheet, shrink its Airbus A220-300 fleet, and boost profitability. Riga will remain its primary hub. The airline expects to operate about 36 A220-300 aircraft by the end of 2026. ezstandalone.cmd.push(function () { ezstandalone.showAds(119); }); This marks a clear reduction from its current fleet of 54 planes. Over the following years, the fleet will grow gradually to around 40 aircraft by 2031. Earlier plans had targeted a much larger fleet of nearly 100 aircraft. Despite the smaller fleet size, airBaltic projects that scheduled capacity will stay broadly stable in the longer term. The airline plans to achieve this through higher aircraft utilisation, a more demand-driven network, and expanded year-round ACMI partnerships. ezstandalone.cmd.push(function () { ezstandalone.showAds(127); }); Financial Targets and Cost Savings airBaltic is targeting roughly €45 million in recurring annual benefits. These gains will come from a mix of cost reductions and new revenue initiatives. Revenue is forecast to rise from €779 million in 2025 to about €800 million in 2027. By 2031, the airline expects revenue to reach approximately €1 billion. EBITDAR is projected to hit around €300 million in the same year. ezstandalone.cmd.push(function () { ezstandalone.showAds(128); }); As part of the plan, airBaltic seeks €225 million in interim financing. This funding will help meet near-term liquidity needs. A longer-term recapitalisation would involve up to €225 million of new debt and €100 million of new equity. Together, these measures total €325 million. The restructuring also proposes converting a portion of the airline’s 2029 Senior Secured Notes into equity. The remaining portion would be replaced by up to €125 million of reduced debt. All financing and recapitalisation steps remain subject to bondholder resolutions and other necessary approvals. ezstandalone.cmd.push(function () { ezstandalone.showAds(129); }); Photo Credit: airBaltic Improved Leverage Outlook Net leverage is expected to improve significantly under the plan. It is projected to fall from 8.94x in 2025 to around 4.8x after the proposed recapitalisation at the end of 2026. By 2031, leverage could decline further to 1.6x. Reasons Behind the Revised Strategy airBaltic said the updated plan reflects several external pressures. These include weaker demand and slower revenue growth, ongoing geopolitical uncertainty, and continued constraints on Pratt & Whitney engine availability. The airline stressed that normal operations continue without interruption. Existing tickets, bookings, and passenger services remain fully unaffected by the restructuring. ezstandalone.cmd.push(function () { ezstandalone.showAds(130); }); Looking Ahead The revised business plan marks a shift toward greater financial discipline and operational focus. By operating a leaner fleet more intensively and securing fresh capital, airBaltic aims to build a more resilient and profitable business over the coming years. The carrier continues to serve its network from Riga while adapting to current market realities. Further updates on the financing process and implementation of the plan are expected as approvals progress. This strategic reset positions airBaltic to navigate current challenges while laying the groundwork for sustainable growth through 2031. ezstandalone.cmd.push(function () { ezstandalone.showAds(131); });
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.
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