AirBaltic seeks bankruptcy protection as jet fuel costs surge

Latvian carrier airBaltic has filed voluntarily for Chapter 11 bankruptcy protection in New York to restructure its debt and continue operations amid an aviation downturn tied to the U.S. war with Iran. CEO Erno Hilden said the airline has secured €350 million (US$405 million) in financing from lenders including Strategic Value Partners, Barclays, Hayfin Capital Management, Morgan Stanley and Oaktree Capital Management, with an interest rate of about 12% and court approval required. The company plans to target €44 million in annual profit improvements. airBaltic expects to complete restructuring by June next year, with flights continuing as scheduled under court supervision. The bankruptcy process is also intended to cancel or defer deliveries under a $3.5 billion order for 40 Airbus aircraft and additional Pratt & Whitney engines worth $106.7 million. The filing cites jet fuel prices doubling and lists €583 million in funded debt and lease liabilities, plus €106 million owed in taxes and fees.