Court Authorized airBaltic Operations in Bankruptcy
The Southern District of New York approved motions allowing airBaltic to maintain daily flights during its Chapter 11 restructuring.
Updated on Oct. 12, 2026 in Business Travel
Live Poll
Should national governments continue to support major airlines that are going through bankruptcy proceedings?
The Southern District of New York Bankruptcy Court has granted airBaltic permission to continue business operations as the airline undergoes Chapter 11 proceedings. The court approved several motions that allow the carrier to honor existing aviation contracts, maintain loyalty programs, and fulfill employee salary and benefit obligations.
Why it matters
These court-approved measures are designed to preserve the liquidity and operational continuity of the airline while it navigates its financial restructuring. The authorization ensures that international travel services and business activities remain stable throughout the complex Chapter 11 process.
airBaltic has already received EUR 140 million as the first portion of its total planned EUR 350 million debtor-in-possession financing. The court has scheduled a hearing for October 19 to address the remaining EUR 35 million in financing.
The players
airBaltic
This Latvian airline is the primary flag carrier of Latvia and is currently navigating a Chapter 11 bankruptcy restructuring process.
Southern District of New York Bankruptcy Court
This federal court is overseeing the legal bankruptcy proceedings for airBaltic.
Lufthansa
This major German airline group holds a 10 percent ownership stake in airBaltic.
Latvian Government
The state of Latvia is the majority owner of airBaltic with an 88.37 percent share of the company.
The details
The court orders enable the airline to pay specific pre-proceeding claims to foreign suppliers while continuing its tax and duty obligations. With the Latvian government holding an 88.37 percent stake and Lufthansa owning 10 percent, the airline is working to maintain standard operations through the restructuring, which is expected to conclude by mid-2027.
Timeline
Bondholders supported interest payment capitalization in August 2026.
A court hearing regarding remaining DIP financing is scheduled for October 19, 2026.
The DIP financing hearing may continue on October 20, 2026.
Capitalized bond interest payments are due on November 14, 2026.
The Chapter 11 restructuring process is expected to finish by mid-2027.
Travel Outlook
The use of Chapter 11 of the United States Bankruptcy Code to restructure debt provides a standard legal framework for distressed international airlines to preserve assets. This process allows the carrier to navigate financial pressure while maintaining international flight routes and service standards.
Passengers should monitor official airline announcements regarding current and future bookings as the restructuring process proceeds. Travelers may continue to utilize existing loyalty programs and services as normal while the company navigates the court-supervised plan.
The takeaway
The court's decision provides immediate stability for airBaltic's ongoing operations and international flight schedules. Business travelers can expect continuity in service levels throughout the restructuring period scheduled to last until 2027.
What happens next
The Southern District of New York Bankruptcy Court will hold a hearing on October 19, 2026, to review the remaining EUR 35 million in debtor-in-possession financing requested by the airline.
Further reading
Learn more about the industry impact of corporate restructuring at Business Travel.
Live Poll
Should national governments continue to support major airlines that are going through bankruptcy proceedings?
