President believes loan to airBaltic should be linked to restructuring plan

RIGA - A short-term state loan of EUR 30 million to Latvia's national carrier airBaltic should be linked to the company's restructuring plan, President Edgars Rinkevics believes.

After a meeting with Prime Minister Evika Silina (New Unity) on Wednesday, the president told reporters that the national airline is important to Latvia, especially because it is the only one in the Baltics. At the same time, the president sees criticism and questions about the company's financial burden to be legitimate, which is why a discussion on serious restructuring is necessary.

Rinkevics noted that lawmakers' questions about the future of the company, its operations and the repayment of the state loan were understandable. He believes that airBaltic management and the Transport Ministry should give honest and open answers to these questions, as the decision on the loan will be made by the Saeima, and each MP needs to justify their vote to constituents and to the public at large.

"If the decision is made on the loan, on additional financing, there must be a clear plan, responsibilities, and rules of the game," the president said.

He mentioned that public opinions on the matter are different - some believe that it is enough to invest money in the company, while others appreciate the benefits of a national airline. Rinkevics said that the prime minister had informed him about Monday's closed cabinet meeting, where representatives of several sectors expressed their support for the airline.

"Not only airBaltic, but also healthcare is important for national interests. There are many issues to be addressed there as well. Decisions are not easy," the president stressed.

In his view, if the decision makers see a clear plan and a way to move toward the transformation of the airline and preserve the company in light of the geopolitical circumstances, which in turn helps to ensure the interoperability of transport, as well as the support and development of certain sectors, it is "worth fighting for".

As reported, the Transport Ministry has indicated that external factors such as the conflict in the Middle East, rising fuel prices, and the suspension of certain routes have had a significant impact on airBaltic's costs, and the airline needs a EUR 30 million loan to ensure the company's stable operations until the implementation of its new business plan.

However, the Saeima Budget and Finance (Taxation) Committee did not approve the decision because of objections raised by the Union of Greens and Farmers.

LETA also reported, airBaltic's losses last year amounted to EUR 44.337 million, which is 2.7 times less than in 2024. Last year, airBaltic's turnover increased by 4.2 percent compared to 2024 and amounted to EUR 779.344 million.

In 2025, the airline carried a total of 5.2 million passengers on its route network, an increase of 1 percent compared to 2024.

At the end of August last year, German national airline Lufthansa became a shareholder in airBaltic. Currently, the Latvian state owns 88.37 percent of airBaltic shares, Lufthansa - 10 percent, financial investor Aircraft Leasing 1, owned by Danish businessman Lars Thuesen - 1.62 percent, and other shareholders - 0.01 percent. The company's share capital is EUR 41.819 million.

After the initial public offering (IPO) of airBaltic shares, the size of Lufthansa's stake will be determined by the potential IPO market price. The transaction also provides that Lufthansa will own at least 5 percent of airBaltic's capital after the potential IPO.

On August 30, 2024, the Latvian government agreed that the state should retain at least 25 percent plus one share in airBaltic's capital after the IPO. On August 19, 2025, the government decided that Latvia, like Germany's Lufthansa, would make a co-investment of EUR 14 million in airBaltic ahead of a potential IPO.

However, given the 2025 financial results and market conditions, airBaltic has suspended its planned IPO and does not currently view it as a potential source of capital for 2026, according to airBaltic’s annual report.

The report indicates that, despite the expected improvement in operational and commercial performance, the airline will operate with a negative free cash flow in 2026, and, based on current forecasts, management expects that an additional capital injection of EUR 100 to 150 million will be required to finance operations for the 2026/2027 winter season.

Transport Minister Atis Svinka (Progressives) has noted that an IPO is not the only way to raise capital, and the airline’s management has been given the broadest possible mandate to seek opportunities to raise capital using various financial instruments. Thus, the airline’s goal for 2026 is not only to reduce costs but also to raise capital.