airBaltic is seeking final approval of a Chapter 11 financing facility of up to €350 million after obtaining interim authority for an initial €140 million sub-tranche, or another amount authorized under the interim order. The September 16 order makes the remainder of Tranche 1 and later tranches dependent on final approval and other conditions. It does not establish how much cash has been disbursed. Interim DIP order, pp. 1–3
On October 2, the airline filed a notice attaching a proposed final financing order. That submission is not evidence that final approval was entered. A final hearing is scheduled for October 9, 2026, at 10 a.m. Eastern Time. October 2 filing notice, pp. 1–2; Second-day hearing notice, pp. 1–2
This account covers selected case filings through October 2, 2026.
The commitment exceeds initial borrowing authority
The CFO declaration identifies Barclays, Hayfin Capital Management, Morgan Stanley, Oaktree Capital, and Strategic Value Partners as the selected DIP lenders. The company announcement names Strategic Value Partners as arranger of the €350 million financing commitment. CFO declaration, p. 7; Company announcement reproduced by Breaking Travel News
The September 16 interim order describes three tranches totaling up to €350 million. Only an initial portion of Tranche 1 is covered by the initial borrowing authority; the remaining funding depends on final approval and other conditions. Interim DIP order, pp. 1–3
Funding component
Principal amount
Availability described in the interim order
Tranche 1
€175 million
Initial sub-tranche of €140 million, or another amount authorized under the order; the remainder depends on final approval and other conditions.
Tranche 2
Up to €125 million
Dependent on final approval and other conditions.
Tranche 3
Up to €50 million
Dependent on final approval and other conditions.
Financing Structure Under the Interim Order
These amounts describe the facility structure and authorized borrowing, rather than cash actually drawn. The October 2 proposed final order does not establish that the conditions for further funding have been met.
At filing, airBaltic announced a financing rate of SOFR plus eight percentage points, estimated at approximately 12% at that time. This is the announced rate reported in September, rather than a description of additional payment or fee provisions in the October 2 credit agreement. ch-aviation
Aircraft refinancing raises a collateral-priority dispute
The interim order authorizes using initial proceeds to repay EDC/Axiom finance-lease obligations, transfer the related collateral to Air Baltic, and grant DIP liens over that collateral. Authorization does not establish that the repayment, transfers, or lien transactions have closed. Interim DIP order, p. 3
Individual bondholder Jose Manuel Aisa Mancho challenges permanent collateral-priority changes rather than operating liquidity itself. He argues that acquiring the financed equipment triggers obligations to provide first-ranking bond security and that concurrent DIP liens conflict with those obligations. These are the creditor’s allegations, not court findings. Bondholder objection, pp. 2–3
Additional financing objections and supplemental objections were filed through October 1. The reviewed filings do not establish the final disposition of those disputes.
The business plan requires more than new financing
The CFO reported approximately €503.3 million in funded debt and €855.6 million in operating-lease obligations, excluding finance leases, at filing. The declaration generally presents financial information on an unaudited, consolidated basis. CFO declaration, pp. 2, 17–18
Separately, Airways reported that the Republic of Latvia held 88.37% of the airline’s voting rights at the end of March, while Lufthansa Group held 10%. Airways
The CFO attributes the liquidity crisis to pandemic losses, lost Russia, Belarus, and Ukraine routes, Pratt & Whitney engine shortages, and sharply higher fuel costs in 2026. Management’s proposed business plan includes returning approximately 20 surplus aircraft, reducing lease rates, concentrating on the core hub, obtaining counterparty concessions, and targeting approximately €45 million in annual savings. Those measures are proposals and targets, rather than completed operating changes or achieved savings. CFO declaration, pp. 4–6
The airline said at filing that flights and customer services would continue normally, existing reservations would remain valid, and refunds and service credits would be handled under existing policies. Company announcement reproduced by Breaking Travel News
The next financing decision
The September 21 hearing notice schedules final consideration of the DIP motion and other first-day relief for October 9 at 10 a.m. Eastern Time via ZoomGov. Second-day hearing notice, pp. 1–2
The next material evidence will be any entered final order and its treatment of additional borrowing authority and contested collateral interests. Through the October 2 evidence cutoff, the record supports interim financing authority and a proposed final order. It does not establish final DIP approval, a confirmed restructuring plan, emergence, or completed fleet reductions.
Sources
Interim DIP order, pp. 1–3 /documents/a3f0a664-9f3b-4855-825e-4c99afcdadb9/
October 2 filing notice, pp. 1–2 /documents/2f4f718d-3970-4715-89d9-5104b8e27026/
Second-day hearing notice, pp. 1–2 /documents/ad5c9d6c-efef-4121-a010-a1d57a219574/
Petition, p. 1 and docket entry /documents/bdf52d1d-ba8f-4a5d-9e52-da0a477faf0f/
CFO declaration, pp. 1–2 /documents/f19adcdf-378d-4139-8207-ef36a550fff9/
Bondholder objection, pp. 2–3 /documents/fd3e3531-d2d2-4161-9d71-5f42e6069ab1/
Company announcement reproduced by Breaking Travel News https://www.breakingtravelnews.com/news/article/airbaltic-initiates-chapter-11-financial-reorganisation-flights-and-custome/
This article was researched and written with AI assistance, using court filings, public records, and news sources. AI-generated content can contain errors. Verify all information against primary sources before relying on it. This is not legal or financial advice. See the disclaimer.