airBaltic Announces Key Elements Of The New Business Plan

‍RIGA — Today airBaltic (BT) shared the key elements of its updated business plan,  aimed at strengthening long-term competitiveness, establishing a sustainable capital structure, supporting long-term growth and reliable connectivity for Latvia and Europe.

Changing Environment

The previous business plan was developed in line with a planned initial public offering (IPO), sustained growth in passenger volumes and ticket revenue in the Baltics and wider European markets, supporting fleet growth to 100 Airbus A220-300 aircraft.  

Over the years, the operating environment has changed materially. Moderated demand and revenue growth, geopolitical events in Ukraine and the Middle East, increasing costs and uncertainty, as well as Pratt & Whitney engine availability constraints, have negatively impacted BT’s fleet utilization.

The revised business plan reacts to industry challenges by focusing on BT’s financial stability, followed by growth that’s geared to support sustainable profitability, cash generation, and a stronger balance sheet.

“Every successful airline must continuously adapt to a changing market. Thus, this business plan is about making disciplined choices that strengthen airBaltic’s long-term competitiveness while preserving what matters most – reliable connectivity and operations, together with financial sustainability. It provides a stronger foundation for the company’s future and positions us to create long-term value for our customers, partners and Latvia,” says Erno Hildén, President and CEO of airBaltic.

New Business Plan 

The new business plan is set to align BT’s network, fleet, costs and capital structure with current market conditions, while preserving its core role in connecting Latvia and the Baltics to the world. 

The revised plan includes a focused, demand-driven network built around Riga, a reduced Airbus A220-300 fleet, stronger year-round ACMI operations and improved operational efficiency, creating a more resilient business and boosting financial sustainability.

Pursuing Profitable Routes Over Broader Expansion

The business plan introduces a network strategy centered on Riga, as airBaltic’s primary hub. Instead of pursuing broader expansion, the airline will focus on increasing depth and frequency on the routes with strongest demand and profitability.

airBaltic’s bases will continue to complement the network with selected point-to-point connections, while tactical and seasonal operations will improve year-round fleet deployment.   

Improved Fleet Deployment

Latvian national carrier currently operates 54 Airbus A200-300 aircraft. By the end of this year, it will be reduced to approximately 36 aircraft and is set to increase to 40 aircraft by 2031.

Despite a reduced fleet, airBaltic’s scheduled capacity is expected to remain broadly stable as a result of improved aircraft utilization.

Increased commercial cooperation with ACMI partners will ensure even more efficient fleet deployment and reduce seasonal volatility across the business.

Initially, scheduled flights available seat kilometers (ASK) are forecast to gradually drop from approximately 9.6 billion in 2026 to 8.7 billion in 2027, before gradual growth to around 10.5 billion in 2031, reflecting a focused network strategy aimed at profitable growth.

Balanced Capacity Deployment and Lower Cost Base

Enhanced partnership with ACMI partners will support BT’s return to profitability under the new model and help to achieve more balanced fleet deployment during summer and winter.

Balanced capacity deployment would help reduce the company's fixed-cost burden during the lower-demand winter season, mitigate seasonality of network business, diversify revenue sources, and provide greater flexibility to allocate aircraft based on market demand.

Combined fleet, network, and operational initiatives are expected to deliver EUR 45 million in recurring annual benefits, primarily by reducing operating costs, but also by seeking new revenue opportunities.

The revised business plan prioritizes strict cost discipline along with growing revenue to rebuild financial strength. Together with optimized capacity deployment, a structurally lower cost base is expected to improve margins and cash generation.

Interim Recapitalization

To support revised business plan implementation and near-term liquidity requirements, the carrier is seeking EUR 225 million of interim financing. 

The interim financing is intended to support airBaltic until a permanent financing solution is secured and is subject to the required bondholder approvals and other approvals.

The proposed permanent financing package comprises up to  EUR 225 million of new debt financing and EUR 100 million of new equity capital. 

The part of the 2029 Senior Secured Notes will be converted into equity, and the rest refinanced with up to €125 million of new reduced debt. Selected balance-sheet obligations will also be partly converted into equity. Certain parts of the proposed solution are subject to required approvals.

Discussions Still in Progress

As the announcement has been released today by airBaltic, the proposed interim financing and broader recapitalization have not yet been agreed on and finalized. 

Discussions with key stakeholders and prospective providers of interim financing are still underway; stakeholder agreements, the required bondholder resolutions and other approvals are yet to be secured.

Latvian carrier is encouraging airline’s 2029 Senior Secured Notes holders to participate in the upcoming voting processes related to proposed recapitalization and updated business plan. 

The reconvened vote on the required resolutions will occur on 17 August 2026, expected to be followed by further voting rounds.

Financial Outlook

Under the revised plan, airBaltic is expecting gradual revenue growth reaching EUR 1.0 billion in 2031 and increased EBITDAR of EUR 300 million in 2031, representing an EBITDAR margin of approximately 25–29%.

The business plan envisages gradual improvement of the company's financial state through improved operational performance and the implementation of proposed recapitalization.

Financial improvement is reflected in the net leverage ratio, measured as net debt to EBITDAR,  and indicates how many times the company’s net debt exceeds its annual earnings capacity, where a lower ratio represents a stronger financial position. 

The carrier warns that the presented financial information is BT’s current expectations and assumptions and not a guarantee of future performance. Actual results are subject to a number of factors, including fuel prices, foreign exchange rates, inflation, demand trends, supply chain disruptions and the successful implementation of the new business plan.

The full announcement with detailed financial figures can be found on Euronext Dublin website.

Business Plan Implementation Underway

Latvian national carrier is implementing the revised plan through a number of interconnected steps; further disclosures are to be published through the stock exchange, as required and when appropriate.

airBaltic continues normal day-to-day operations during the business plan implementation process; scheduled flights and passenger services are not affected by the implementation.