The Budget and Finance Committee of the Saeima has approved the transfer of a bill on the financial stabilization of airBaltic to parliament. The document has been granted urgent status, so deputies plan to consider it in two readings on August 20. The main goal of the bill is to provide the government with the necessary powers for prompt participation in the rescue of the airline if needed during its financial restructuring. One of the proposed measures is the possibility for the state to participate in the purchase of new airBaltic bonds for up to 30 million euros. The state will be able to enter the deal simultaneously with private investors and on the same terms, however, the final decision on the purchase will be made separately by the Cabinet of Ministers. Additionally, it is proposed to convert the company's existing obligations to the state into its equity capital. This concerns state-owned bonds worth 50 million euros, as well as the remaining part of the state loan — over 17 million euros. In fact, this means that instead of repaying part of the debt, the state may increase its equity stake in the airline. Such a mechanism is often used in the financial rehabilitation of large enterprises that need to reduce their debt burden. Another measure concerns a state loan of 30 million euros. The government proposes to extend the final repayment term from the end of August to the end of the current year. At the same time, the company has already repaid part of the loan and paid the contractually stipulated interest totaling 12.9 million euros. The need for additional decisions arose after the holders of airBaltic bonds agreed to temporarily ease the financial burden on the carrier. They allowed the next interest payments not to be made in cash but to be added to the principal amount of the debt. Also, until November 2026, the airline is exempt from the requirement to maintain a minimum level of liquidity. At the same time, the issue of attracting interim financing of 225 million euros, which the company hopes to obtain as part of the implementation of a new business plan, remains open. This item was not even considered at the bondholders' meeting on August 17, as it was not included in the agenda. Prime Minister Andris Kulbergs previously stated that negotiations on financial restructuring are ongoing, but there is currently no final agreement on the future of airBaltic. This is why the government is asking parliament to provide the necessary powers in advance for decision-making. According to the business plan approved by the company's board, the carrier intends to attract up to 225 million euros in interim financing and then conduct a large-scale recapitalization. The plan also includes reducing the Airbus A220-300 fleet from the current 54 to 36 aircraft by the end of 2026, with a subsequent gradual increase to about 40 aircraft by 2031. Despite ongoing financial difficulties, in 2025 airBaltic increased the number of passengers carried to 5.2 million, and losses decreased almost threefold — to 44.3 million euros. However, the company has already abandoned plans to conduct an IPO in 2026, acknowledging that the current market situation does not allow for capital raising in this way.
