The Saeima’s Budget and Finance (Tax) Committee has not yet approved the government’s decision to grant a 30 million euros short-term loan to Latvia’s national airline airBaltic, Transport Minister Atis Švinka said after a closed committee meeting on Wednesday, citing objections from the Union of Greens and Farmers (ZZS).
The committee is expected to revisit the issue on the 14th of April, after the Easter recess. Initially, it had been planned that the proposal would be approved on Wednesday and subsequently reviewed by parliament the same day.
Švinka expressed confusion over the concerns raised by ZZS, describing them as political rhetoric. He emphasised that the matter had already been explained to the coalition and was unanimously supported by the government on the 31st of March.
According to the minister, ZZS had received all necessary information well in advance, including through the Ministry of Economics, which is led by the party and participated in preparing the decision. “The fact that the parliamentary faction claims not to know raises questions about the quality of communication within ZZS,” Švinka said.
He suggested that internal dynamics within the party may be contributing to the situation,
referring to confusion and differing positions among its members. Responding to questions, Švinka also pointed to voting patterns in his own dismissal vote, noting that MPs had varied motivations, including former welfare minister Uldis Augulis.
Commenting on whether the delay could affect the airline’s operations, Andrejs Martinovs, chairman of airBaltic’s supervisory board, told LETA that the company continues to operate “in a normal and sufficiently sustainable mode.”
He said the airline currently feels relatively stable and that the loan is not so urgent as to require immediate approval. “We were prepared and expected that this could take a bit more time,” Martinovs noted, adding that it is normal for MPs to raise additional questions requiring further clarification.
As previously reported,
the 30 million euros loan is intended to help offset the sharp increase in aviation fuel prices.
The government approved the proposal on the 31st of March, but final approval still rests with the Saeima.
Prime Minister Evika Siliņa has stressed that airBaltic is critically important for Latvia’s security and connectivity, providing grounds for granting the short-term loan amid rapidly rising fuel costs.
Švinka added that the loan is designed to stabilise the impact of fuel price increases and ensure continued operations, including flight schedules. However, it does not replace the airline’s obligation to develop a strategic business plan and move toward financial sustainability.
He also confirmed that the loan proposal complies with European Union regulations, and that airBaltic has submitted a cash flow plan indicating the loan could potentially be repaid even earlier than expected.
The minister stressed that the loan is not a state “bailout” or support mechanism,
and that the airline must continue working on its business model and attracting capital, potentially with state participation.
Martinovs noted that the loan would help stabilise the situation and reduce negative impacts. According to company forecasts, and in the absence of major disruptions, the airline should be able to repay the loan.
At the same time, airBaltic is working on a revised business plan. The previous plan envisioned doubling the fleet, which would require additional investment. The company is therefore exploring options to seek private investors, while existing shareholders—including the state—may also participate in future capital increases.
The request for state support follows rising costs driven by geopolitical tensions and increased aviation fuel prices, which have significantly impacted the airline’s financial performance.
“The current plan is doubling the airline’s fleet, but this is not possible without investment.
Therefore, the company continues to work on attracting potential private investors,
and it is not excluded that existing shareholders may also participate in capital raising, given that the state intends to retain its stake in airBaltic,” Martinovs said.
airBaltic Chief Financial Officer Vitolds Jakovļevs said in an investor call in March this year that the airline’s total fuel consumption for the remainder of the year is approximately 165,000 tonnes, of which 17,000 tonnes were fixed or hedged at a price of 567 euros per tonne.
The Ministry of Transport previously informed that at the end of March this year, airBaltic officially approached the ministry, informing the shareholder about the impact of external factors on the company’s financial and operational performance. The military conflict in the Middle East has caused a significant increase in aviation fuel prices, which in turn raises costs and affects profitability.
After receiving and evaluating airBaltic’s letter regarding the need for a short-term loan as one of the possible preventive stabilization instruments, Švinka proposed that the issue be considered at Tuesday’s government meeting.
He also noted that it is crucial to ensure uninterrupted operations of the company
at a time when external factors are particularly strongly affecting the aviation sector.
The ministry stated that the company continues to operate flights according to the planned schedule, and a potential loan could help maintain a stable flight network, avoiding abrupt changes and absorbing the pressure of rising fuel prices.
It was also noted that, for security reasons, airBaltic had previously been forced to suspend flights to Tel Aviv and Dubai, which reduced revenue and affected the efficiency of the route network. At the same time, aviation fuel prices have risen significantly due to the conflict, at times nearly doubling.
Work is also ongoing on a new business plan, which is expected to be completed this summer. A potential short-term loan could help stabilize operations until the implementation of the new plan begins, the ministry explained.
It has already been reported that airBaltic Group’s turnover last year increased by 4.2%
compared to 2024, reaching 779.344 million euros. Meanwhile, the group’s losses were 44.337 million euros, which is 2.7 times less than in 2024.
In 2025, the airline carried a total of 5.2 million passengers, which is 1% more than in 2024.
Last summer, Germany’s national airline Lufthansa became a shareholder in airBaltic. Currently, the Latvian state owns 88.37% of airBaltic shares, Lufthansa owns 10%, the Danish entrepreneur Lars Thuesen’s company Aircraft Leasing 1 owns 1.62%, and 0.01% is held by others. The company’s share capital is 41.819 million euros.
Following the initial public offering (IPO) of airBaltic shares, Lufthansa’s stake will depend on the potential IPO market price. The deal also requires that Lufthansa will own no less than 5% of airBaltic’s capital after the IPO. On August 30, 2024, the Latvian government agreed that the state must retain at least 25% plus one share after the IPO.
Last August, the government decided that Latvia, like Lufthansa, would make a co-investment of 14 million euros in airBaltic prior to a potential IPO.
However, taking into account the 2025 financial results and the market situation, airBaltic has suspended the potential IPO and currently does not consider it a viable source of capital in 2026, according to the company’s annual report.
The report states that despite expected improvements in operational and commercial performance, the airline will operate with negative free cash flow in 2026. Based on current forecasts, management expects that an additional capital injection of 100–150 million euros will be required to finance operations for the 2026/2027 winter season.
Švinka noted that an IPO is not the only way to raise capital, and the airline’s management has been given a broad mandate to explore various financial instruments. Thus, the airline’s task for 2026 is not only cost reduction but also capital raising.
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