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Executive Summary
airBaltic is retreating from its 100-aircraft ambition, cutting the Airbus A220-300 fleet from 54 to about 36 by year-end 2026 and only growing back to 40 by 2031, while refocusing on its Riga hub.
The Latvian carrier has secured up to €257 million of interim financing via senior-priority bonds after bondholders agreed to defer coupons on the €380 million 14.5% notes due 2029 and waive the minimum liquidity covenant until November 14, 2026.
Q1 2026 revenue reached €149 million with a €70.1 million net loss even though every A220-300 was serviceable, exposing a utilization and demand problem rather than a supplier problem, while August 2026 traffic rose 5% year-on-year to 554,700 passengers.
Lufthansa Group holds a 10% convertible stake acquired for €14 million and operates up to 21 airBaltic A220-300s in summer, making the German group both airBaltic’s biggest ACMI customer and its most strategically important shareholder outside Latvia.
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Here’s what you get in this analysis report:
airBaltic Company Profile: Key Facts
airBaltic Revenue and Financial Analysis
Growth Drivers and Key Services
airBaltic Fleet Analysis
Fleet Size and Composition
Aircraft Type Strategy and Configuration
Fleet Strategy: From Growth to Financial Stability
Retiring the 100-Aircraft Ambition
airBaltic Route Network Strategy and Major Destinations
Network Design Philosophy
Summer 2026: The Last Growth Season
Winter 2026/2027: Selective Additions and Cancelled Ideas
Summer 2027 Preview
Route Network Under the Revised Plan
Major Operational Bases (Hubs)
airBaltic Competitive Position
Major Competitors
airBaltic vs. Ryanair
airBaltic vs. Wizz Air
airBaltic vs. Finnair
airBaltic vs. Norwegian
airBaltic vs. Lufthansa Group
Other Strategic Contexts
The Pratt & Whitney PW1500G Chapter
The IPO That Keeps Slipping
The Lufthansa Convertible
Latvian State Support
Sustainability and CO2 Costs
Regional Geopolitics
The 70 Millionth Passenger Milestone
Key Risks
My Final Thoughts
Official Sources and Data
Introduction
airBaltic spent five years selling investors on a story of relentless Airbus A220 growth toward a 100-aircraft fleet, and in August 2026 it formally buried that story.
The revised business plan shrinks the fleet by a third within months, tears up the previous IPO thesis, and asks bondholders, the Latvian state, and Lufthansa to shoulder a recapitalization that’s still being negotiated.
The Q1 2026 numbers are the first glimpse of what happens when Pratt & Whitney’s PW1500G engine shortage stops being an excuse, and they do not flatter the airline’s underlying commercial performance.
This report breakdowns airBaltic in 2026, how it makes money, what its fleet and route decisions look like after the restructuring, where the real risks sit & more.
Let’s analyze everything in detail.
airBaltic Company Profile: Key Facts
Legal name: A/S Air Baltic Corporation (airBaltic)
Founded: August 28, 1995 (30 years of continuous operation)
Headquarters: Riga, Latvia
Primary hub: Riga International Airport (RIX)
Ownership: Republic of Latvia ~88%, Lufthansa Group 10% (convertible),
remainder held by other shareholders including Aircraft Leasing 1
CEO: Erno Hildén (since December 1, 2025)
Fleet type: Single-type Airbus A220-300
Fleet size: ~54 A220-300s in mid-2026, targeted at ~36 by end-2026
Employees: ~3,600 (industry-tracked figure)
IATA / ICAO: BT / BTI
Callsign: AIRBALTIC
Bases: Riga (RIX) + Tallinn (TLL), Vilnius (VNO), Tampere (TMP)
with a seasonal winter base in the Canary Islands
airBaltic was founded through a joint venture between the Latvian state and SAS in 1995, and today Latvia holds roughly 88.37% of voting rights. SAS long ago exited, and the German group replaced it in the ownership registry through a convertible instrument.
Riga is the only true hub, with Tallinn, Vilnius, and Tampere operating as smaller crew bases rather than full spoke-and-hub operations. The Tampere base was already shifted from permanent to non-permanent status during Q1 2026, an early signal of the deeper retrenchment that followed in August.
The single-type A220-300 strategy is unusual in Europe and gives airBaltic simplicity in maintenance, training, and rostering, but it also concentrates operational risk in one engine family, the PW1500G, that has generated well-documented reliability issues since 2023.
airBaltic Revenue and Financial Analysis
Revenue: Full Year 2025 as the Baseline
airBaltic closed calendar 2025 with revenue of €779.3 million, a 4% year-on-year increase, and carried a record 5.2 million passengers across its network. Adjusted EBITDAR was €143.9 million with an 18.5% margin, down from €184.2 million a year earlier.
The full-year 2025 net loss was €44.3 million, an improvement of €73.8 million versus 2024, helped by better second-half yields and by favorable foreign exchange effects on the airline’s USD-denominated liabilities.
airBaltic FY2025 headline results
Revenue: EUR 779.3 million (+4% YoY)
Adjusted EBITDAR: EUR 143.9 million (margin 18.5%)
Net loss: EUR 44.3 million (improved by EUR 73.8m YoY)
Passengers carried: 5.2 million (record)
Load factor pressure: first-half yield weakness, second-half recovery
Management’s own commentary on the 2025 print explicitly flagged limited aircraft availability from PW1500G engine maintenance, higher air navigation and CO2 costs, and softer ACMI utilization in the winter months as the main drags on profitability.
Latest Quarterly Earnings: Q1 2026 Under a New CEO
Q1 2026 was Erno Hildén’s first full reporting period as CEO after taking over on December 1, 2025, and the numbers are unusually clean because zero A220-300s were grounded for engine issues during the quarter, versus an average of 13 aircraft parked in Q1 2025.
Revenue rose to €149 million, ASKs improved 7.3% year-on-year, and the airline operated an average of 101 routes, six more than a year earlier. The wet-lease business scaled meaningfully: airBaltic leased out an average of 9.4 aircraft versus 6.2 in Q1 2025.
Despite the operational normalization, the net loss deepened to €70.1 million, worse by €40.7 million than Q1 2025 when a third of the fleet was in a hangar. Adjusted EBIT worsened by €40.6 million to a loss of €43.3 million.
airBaltic Q1 2026 snapshot
Revenue: EUR 149 million
Adjusted EBIT: EUR (43.3) million
Net loss: EUR (70.1) million
ASKs vs Q1 2025: +7.3%
Aircraft grounded (avg): zero (Q1 2025: 13 aircraft)
Utilization vs Q1 2025: -12.9%
Own-network passengers: just over 1.0 million
Passengers incl. ACMI-out: 1.4 million+
Cash and restricted cash: EUR 32.9 million at end of Q1
Working capital deficit: EUR 415 million
Yield rose 4.8% and RASK improved 2.4%, but ex-fuel CASK increased 4.9% and outpaced the unit-revenue gains.
The most uncomfortable data point is that fleet utilization fell 12.9% year-on-year even with every aircraft serviceable, a signal that demand and network profitability, not spare engines, are now the binding constraint.
Guidance: Withdrawn for 2026
Management declined to provide 2026 guidance at the Q1 disclosure on May 13, 2026, citing fuel-price volatility, geopolitical developments including the outbreak of the war in Iran in late February 2026, and potential airspace restrictions on the airline’s core European markets.
Subsequent to the Q1 close, airBaltic received a €30 million loan from the Republic of Latvia to support liquidity, and management has since layered on additional financing measures described in the balance-sheet section below.
Balance Sheet and Liquidity
The Q1 2026 numbers describe an airline running on fumes at the treasury level: cash and restricted cash of €32.9 million and current liabilities exceeding current assets by €415.1 million.
The high-yield capital structure, built around €380 million of 14.5% notes issued in 2024 and due 2029, is expensive to service.
On August 17, 2026, bondholders approved deferring the August 14 and November 14, 2026 coupon payments into principal and waiving the minimum liquidity requirement until November 14.
On September 3, 2026, the airline announced up to €257 million of interim financing via senior-priority bonds and external providers.
Latvia’s parliament passed the Air Baltic Corporation AS Financial Stabilization Measures Law on August 20, 2026, authorizing the state to purchase roughly €30 million more of the airline’s bonds and to convert up to €50 million into equity, on top of the €50 million already held.
Restructuring milestones summary
May 13, 2026 Q1 2026 results; 2026 guidance withdrawn
Aug 11, 2026 Revised business plan published (fleet to ~36 by year-end)
Aug 17, 2026 Bondholder vote approves coupon deferral and liquidity waiver
Aug 20, 2026 Latvian parliament passes stabilization law (54-21)
Sep 3, 2026 Terms agreed for up to EUR 257 million interim financing
Latest Traffic: Passenger Momentum Continues
Operationally the airline is still growing volumes even as it restructures financially. August 2026 traffic reached 554,700 passengers, a 5% year-on-year increase, on 4,801 flights, with a load factor of 83.9%.
For the January to August 2026 period, airBaltic carried 3.567 million passengers, the highest ever for the first eight months of the year, with flight count up 5.7%. July alone delivered 558,000 passengers and a strong 84.2% load factor.
Traffic momentum is not the airline’s problem. Converting that traffic into cash after paying fuel, Eurocontrol fees, personnel, and a 14.5% coupon is.
Cost Structure: Where the Money Goes
The Q1 2026 and FY2025 disclosures give a clear picture of where cost pressure concentrates.
Air navigation and air traffic control fees rose by more than 30% in 2025, CO2 emission allowance costs climbed 52% in Q2 2025 as free EU ETS allocations were cut, and personnel and maintenance costs both grew faster than capacity.
Cost pressures flagged in recent disclosures
Eurocontrol and ATC fees: up more than 30% in 2025
CO2 allowance costs: up 52% in Q2 2025 alone
Ex-fuel CASK Q1 2026: +4.9% YoY (RASK only +2.4%)
Bond coupon burden: 14.5% on EUR 380 million due 2029
Working capital deficit Q1 2026: EUR 415 million
The single biggest controllable lever identified in the August 2026 plan is the fleet, network, and operational restructuring package, which management estimates will generate about €45 million in recurring annual benefits, primarily through lower costs.
On a 2026 EBITDAR base of roughly €158 million, that’s a material margin improvement if delivered in full.