Latvian airline AirBaltic announced on September 14 that it had filed for protection with a New York court under Chapter 11 of the US Bankruptcy Code, known as the Chapter 11 procedure. The company is commencing financial restructuring, the goal of which is to reduce its debt burden and make its operations more financially sustainable, reports Reuters.
According to the company's statement, the situation for passengers will not change. Throughout the entire process, which will be supervised by the court, AirBaltic planes will fly according to their regular schedule. All purchased tickets and reservations will remain valid, and customer service will continue without interruptions.
The government of Latvia owns a controlling stake in AirBaltic.
The company also announced that it had received a commitment from a group of creditors to provide 350 million euros in financing for the restructuring period. These creditors include Strategic Value Partners, Barclays, Hayfin Capital Management, Morgan Stanley, and Oaktree Capital Management. These funds are intended to help the airline continue operations during the financial restructuring.
The company noted that Chapter 11 is a common procedure in the US, allowing a company to reorganize its finances under court supervision while continuing operations. Previously, similar mechanisms were used by airlines such as SAS, United Airlines, Delta Air Lines, GOL, and American Airlines.
AirBaltic President and CEO Erna Hilden stated that the company's main task now is to continue flights while simultaneously implementing the changes outlined in the new business plan.
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