Latvia’s national airline, airBaltic, has repaid the first instalment of its state loan amounting to 6.4 million euro, according to the Ministry of Transport (MoT).
The ministry stated that airBaltic is meeting its obligations and has completed the first repayment under the loan agreement in the amount of 6.4 million euro.
The 30 million euros state budget loan was granted to the airline to stabilise its short-term liquidity position and ensure uninterrupted operations while the company implements its business plan.
Under the terms of the agreement, the loan is being disbursed gradually and is to be repaid in instalments. Full repayment of the loan is scheduled by the 31st of August.
The loan disbursement and servicing are managed by the State Treasury,
while a working group established by the Ministry of Transport oversees airBaltic’s operations, including the use of the loan funds.
The ministry notes that the airline continues to operate flights according to its planned schedule. The loan helps maintain a stable route network, avoiding abrupt changes and mitigating the impact of rising fuel prices.
At the same time, the airline is implementing measures to stabilise its operations, including assessing route profitability, optimising capacity, and flexibly managing its fleet through a business model based on scheduled services and ACMI (Aircraft, Crew, Maintenance and Insurance) leasing operations.
The ministry emphasises that airBaltic is an important driver of the Latvian and Baltic regional economy.
The company directly employs approximately 3,000 people and indirectly supports thousands more jobs in related industries. Through more than 130 direct routes and connectivity to over 300 destinations worldwide, the airline provides critical transport links that promote investment, exports, and tourism while strengthening Latvia’s international competitiveness.
The ministry previously declined to disclose the loan’s interest rate, stating only that it had been determined in accordance with State Treasury methodology and prevailing market conditions.
Officials explained that more detailed information about the loan terms cannot be disclosed because the company is a regulated market issuer and is subject to the European Union’s Market Abuse Regulation (MAR).
At the same time, in line with a decision by the Saeima, the Ministry of Transport has prepared and submitted the required information, explanations, and supporting materials to the European Commission on the 5t of May this year.
The Commission has not yet issued its opinion on the submitted documentation.
As previously reported, a majority of Saeima deputies approved the 30 million euros short-term state loan for airBaltic on the 16th of April this year. The repayment deadline for both the principal and interest is the 31st of August, 2026. The loan was granted without collateral.
It has also been reported that the airBaltic Group recorded a loss of 70.064 million euros in the first quarter of this year, 2.4 times higher than in the first quarter of 2025. Meanwhile, the Group’s turnover increased by 12.3% to 149.086 million euros.
Company representatives explained that the first-quarter losses were driven by foreign exchange fluctuations, financing-related expenses, reduced commercial support, and continued cost inflation across multiple categories.
The airBaltic Group’s turnover last year increased by 4.2% compared with 2024,
reaching 779.344 million euros. At the same time, the Group’s annual loss amounted to 44.337 million euros, which was 2.7 times lower than in 2024.
The airline carried a total of 5.2 million passengers in 2025, an increase of 1% compared with 2024.
Last summer, Germany’s national carrier Lufthansa became a shareholder in airBaltic. Currently, the Latvian state owns 88.37% of the airline’s shares, Lufthansa holds 10%, Danish investor Lars Thuesen’s company Aircraft Leasing 1 owns 1.62%, and the remaining 0.01% is held by other shareholders. The company’s share capital amounts to 41.819 million euros.
Following airBaltic’s planned Initial Public Offering (IPO), Lufthansa’s ownership stake will be determined by the IPO market valuation.
The agreement provides that Lufthansa will retain no less than a 5% stake in the airline after the offering.
On the 30th of August, 2024, the Latvian government agreed that the state must retain at least 25% plus one share following the IPO.
In August last year, the government also decided that Latvia, alongside Lufthansa, would make a 14 million euros capital contribution to airBaltic ahead of the planned IPO.
However, in light of the company’s 2025 financial results and current market conditions, airBaltic has suspended plans for a potential IPO and no longer considers it a viable source of capital in 2026, according to the airline’s annual report.
The report further states that despite expected improvements in operational and commercial performance, the airline is projected to continue generating negative free cash flow in 2026. Based on current forecasts, management expects that an additional capital injection of between 100 million euros and 150 million euros will be required to finance operations during the 2026/2027 winter season.
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