airBaltic filed for Chapter 11 bankruptcy protection on September 14, seeking to restructure roughly $583 million in funded debt and finance lease liabilities under US bankruptcy court supervision — Case No. 26-12188, Southern District of New York. The airline says it expects to complete the process by around June 2027. Flights, tickets, and customer service continue uninterrupted.
Behind that filing is a straightforward, well-documented cause, and a governance question we asked Lufthansa directly about — one it has not answered. airBaltic, when sent our questions, responded: No comment on Company internal matters, but the shareholders’ meeting has supported the course of action.
How It Got Here
Pratt & Whitney is listed as airBaltic’s largest external unsecured creditor in the Chapter 11 filing — a court-filing-level confirmation of what’s been building for years. Years of geared turbofan engine reliability issues, specifically the PW1500G variant that powers airBaltic’s all-A220 fleet, grounded aircraft repeatedly and drained the airline’s finances long before this month’s filing. Multiple outlets, independently, now cite “engine shortages that grounded some aircraft” as a direct contributing cause.
The airline secured $404-405 million (€350 million) in new debtor-in-possession financing, led by Strategic Value Partners and funded by Barclays, Hayfin Capital Management, Morgan Stanley, and Oaktree Capital Management. That capital keeps the airline flying through the restructuring; it doesn’t undo the underlying damage.
Full-year 2025 results showed a €44.3 million net loss on €779.3 million revenue, with the restructuring plan targeting roughly €44 million in annual profit improvements. The fleet is being cut from 54 to roughly 36 A220-300s by year-end, with only gradual regrowth to 40 by 2031 — a real, multi-year retreat from the airline’s earlier ambition to reach 100 aircraft by 2030.
CEO Erno Hildén, who previously served as SAS’s CFO through that airline’s own Chapter 11, confirmed to Reuters that talks are underway with labor unions over workforce reductions, and that the wet-lease and ACMI business will see the biggest changes. The Latvian Aviation Union puts potential job losses as high as roughly 3,000 — airBaltic’s approximate total headcount — though no confirmed number exists yet; negotiations over selection criteria are, in the union’s own words, still producing “serious disagreements.”
Why This Isn’t Just a Latvian Story
Lufthansa Group holds roughly 10% of airBaltic, tied to a strategic investment agreement reached around September 2025 that also came with a Supervisory Board seat. Dr. Alexander Feuersänger currently holds that seat and is also Lufthansa Group’s Senior Vice President of Fleet Management and a board member of German Operating Aircraft Leasing (GOAL), an aircraft lessor with its own leasing relationship to airBaltic. All three roles are independently confirmed and a matter of public record; Feuersänger and fellow Supervisory Board member Lars Thuesen were both elected at the same August 2025 shareholders’ meeting, alongside Chairman Andrejs Martinovs, Jur?is Sedlenieks, and Ruta Amtmane.
Holding overlapping roles across an airline, its strategic investor, and one of its lessors is not unusual in itself — Lufthansa’s board seat is a standard, negotiated feature of its investment agreement, not an unexplained appointment. The open question is procedural, not accusatory: when airBaltic’s board has considered financing and fleet decisions that touch Lufthansa’s or GOAL’s own interests, what recusal practices, if any, apply?
We put that question directly to Lufthansa Group in writing earlier this month, along with questions about its GOAL ownership stake and its broader relationship with airBaltic. Lufthansa has not responded. Separately, and unprompted by our inquiry, Lufthansa told Reuters on September 14-15 that it “doesn’t plan to increase its stake” in airBaltic and declined to comment on its next steps given the Chapter 11 proceedings. That’s a real, on-record statement — but it doesn’t address recusal, and it isn’t an answer to the specific question we asked.
airBaltic itself, through spokesperson Edvards D?lderis, told us: “No comment on Company internal matters, but the Shareholder’s meeting has supported the course of action” — without specifying which course of action, and without addressing the governance question directly either.
A Closer, More Candid Voice: Swiss
The clearest public acknowledgment of risk connected to this situation hasn’t come from Lufthansa Group’s holding company — it came from Swiss, the Group subsidiary that wet-leases up to 10 airBaltic aircraft, up from 6 when the arrangement began in 2022. Swiss CFO Dennis Weber told Swiss press directly that “professional risk management” requires “examining other options to potentially replace capacity that could fall away” — in plain terms, Swiss needs a Plan B. Swiss’s dependency on airBaltic traces to its own shortage of engines and pilots, a gap that has persisted since 2022 and remains unresolved. Swiss maintains that its flights are unaffected today and that airBaltic continues flying reliably on its behalf.
Bottom Line
airBaltic’s bankruptcy has a clear, well-documented cause: years of Pratt & Whitney engine problems that outlasted the airline’s ability to absorb them financially, arriving on top of a fuel-cost shock the whole industry is contending with this year. The new financing and the fleet-and-workforce restructuring give it a real path through Chapter 11. Separately, and still unresolved, is a governance question about overlapping roles at the top of the airline that touches its largest strategic investor and at least one of its lessors — a fair, factual question we put directly to the party best positioned to answer it. As of this writing, they haven’t.
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