We expect new airBaltic CEO and shareholders' position on company's further development - Aseradens

RIGA - We are currently awaiting for a common position from the new shareholder and the new CEO of Latvian national airline airBaltic on how to further develop the company, Finance Minister Arvils Aseradens (New Unity) told Latvian Television last night.

The Minister admitted that the downgrade of airBaltic by the international rating agency Fitch Ratings (Fitch) was unpleasant news, especially considering that there are bonds listed on the Frankfurt Stock Exchange. "This is not good news," he stressed.

Aseradens expects the Ministry of Transport to present the vision of the new shareholder and CEO at the end of December, or at the latest in January.

Asked to comment on a tweet by Prime Minister Evika Silina (New Unity) that she expects the Transport Minister and the new CEO of airBaltic to take clear steps and solutions that go beyond the initial public offering (IPO), Aseradens explained that "the change of management and several other events were the reason for the IPO process not to happen".

"And most likely a new mandate will have to be given to the ministry and to the company's board and management to find a solution on how to capitalize the company," he said, adding that an IPO is not the only solution. "The other is to look for partners and so on. The entry of the German national airline Lufthansa into the company is a step in this direction," he said.

As reported, Fitch Ratings downgraded Air Baltic Corporation's (airBaltic) long-term issuer default rating (IDR) to 'CCC+' from 'B-'/Negative, the ratings agency informed earlier this month.

Fitch has also downgraded airBaltic's senior secured long-term rating on EUR 380 million bonds to 'B-' from 'B'. The Recovery Rate is 'RR3'.

The downgrade reflects higher-than-expected leverage and weaker financial flexibility, resulting in significant external funding needs over the next 12 months. It also reflects uncertainty about the timing and proceeds related to a planned IPO, which is critical for airBaltic's expansion. The company's 2025 operating performance has been weaker than our expectations due to higher operating costs and low profitability, which contributed to heavily negative free cash flow (FCF) and limited liquidity, Fitch points out.

The IDR reflects airBaltic's weak financial profile, due to high lease debt used to fund fleet growth. Rating strengths are its leading position in the Baltic region, new-generation and fuel-efficient fleet and business diversification through the wet leasing of aircraft to larger EMEA carriers, Fitch said in its statement.

LETA also reported, airBaltic Group made a profit of EUR 4.249 million in the first nine months of this year compared to a loss of EUR 48.503 million in the first nine months of 2024.

In turn, airBaltic Group's turnover in the first nine months of this year increased by 3.3 percent compared to the same period last year and amounted to EUR 594.303 million.

At the end of August 2025, German national airline Lufthansa became a shareholder in airBaltic. Currently, the Latvian state owns 88.37 percent of airBaltic shares, Lufthansa - 10 percent, Aircraft Leasing 1, owned by Danish businessman Lars Thuesen, owns 1.62 percent, and 0.01 percent of airBaltic shares belong to other shareholders. The company's share capital is EUR 41.819 million.

After the IPO, the size of Lufthansa Group's holding will be determined by the potential IPO market price. The transaction also provides that Lufthansa Group will own at least 5 percent of the capital of airBaltic after the potential IPO. The Latvian government also agreed in August 2024 that the state must retain at least 25 percent plus one share in the capital of airBaltic after the IPO.

On December 1, Erno Hilden started work as the company's new Chief Executive Officer (CEO).