Terminating operations of airBaltic would have lasting negative impact on Latvian economy - Valainis

RIGA - Terminating operations of national airline airBaltic would have a lasting negative impact on the Latvian economy, according to Economics Minister Viktors Valainis (Greens/Farmers) and the Investment and Development Agency of Latvia's (LIAA) letter to Prime Minister Evika Silina (New Unity), which she has posted on social media.

Silina points out that, ahead of the government's extraordinary meeting on Monday, April 13, she asked Valainis to provide an assessment of what impact terminating airBaltic operations would have on the national economy.

The letter points out that around two-thirds of airBaltic's passenger network directly benefits the Latvian economy, and around one-third the economies of Estonia and Lithuania.

The letter also says that airBaltic leases its aircraft and crew to other airlines, enabling them to overcome capacity shortages, while generating additional revenues and taxes for Latvia.

airBaltic is also of key importance to Latvia's tourism industry.

According to the letter, airBaltic is the largest airline at Riga Airport. If operations of airBaltic are halted, Tallinn and Vilnius will lose airBaltic connections, but these cities have other carriers. For example, Ryanair is the largest airline in Vilnius, and Finnair and Nordic Aviation Group in Tallinn. Latvia would lose proportionally more because airBaltic is the main carrier at Riga airport.

In the letter, LIAA forecasts that foreign tourists in Latvia will contribute EUR 1.4 billion to EUR 1.5 billion to gross domestic product in 2026, including airBaltic's contribution of around EUR 300 million.

In airBaltic is liquidated, Latvia's GDP will decrease by EUR 90 million to EUR 120 million, without taking into account indirect effects such as rising air fares, loss of foreign visitors' trust, reduced future bookings and negative impact on investor sentiment, says the letter.

The letter also says that liquidation of airBaltic will lead to a measurable, permanent and significant reduction in foreign direct investment and hamper Latvia's business development, in particular in high value-added sectors that are critical for the country's long-term growth.

"Aviation plays a crucial role, for example, in facilitating the development of dynamic and efficient supply chains and fostering growth of e-commerce," the letter emphasizes.

As reported, Silina said Wednesday that she is ready to let the government coalition break up if that helps secure the Union of Greens and Farmers' support for a short-term loan to Latvia's national carrier airBaltic.

"If a disintegration of the coalition is the price for securing support for airBaltic, I am ready," Silina said, stressing that support to the airline is more important to her as keeping the government coalition together.

LETA also 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.

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.