Latvia’s national airline airBaltic is seeking to terminate the leases of three additional Airbus A220-300 aircraft, including one painted in the colours of the Latvian flag, because the aircraft are no longer needed for its operations and their leasing costs exceed current market rates, according to a motion filed with the US Bankruptcy Court for the Southern District of New York.
In its motion filed on the 6th of November, airBaltic asks the court for permission to reject the leases of three aircraft, with the termination taking effect from the 25th of November.
The motion concerns aircraft registered as YL-CSN, YL-CSL and YL-CSM.
According to the LETA news agency’s archives, airBaltic received aircraft YL-CSN in late September 2018, making it the 12th Airbus A220-300 in the airline’s fleet.
Aircraft YL-CSL was delivered in November 2018 and painted in the colours of the Latvian flag to celebrate Latvia’s centenary, while YL-CSM was delivered in early December 2018 as the airline’s 14th aircraft.
The court hearing is scheduled for the 9th of December at 10 a.m. New York time, or 5 p.m. Latvian time.
The airline is therefore requesting approval with an earlier effective date.
Objections must be submitted by the 2nd of December at 4 p.m. New York time, or 11 p.m. Latvian time.
The lessor of aircraft YL-CSN is the Ireland-registered company MACH AOE 2 Designated Activity Company, while the other two aircraft are leased from EOS Aviation 18 (Ireland) Limited.
According to an appendix to the court filing, the airframes of all three aircraft are currently located at Riga Airport.
One engine from each of aircraft YL-CSN and YL-CSM is located at a Collins Aerospace facility in Toulouse, France.
The airline states that, following an assessment of its long-term fleet requirements, it concluded that these aircraft are no longer included in its future fleet and business plans.
Furthermore, the costs of the relevant lease agreements exceed current market rates for comparable aircraft.
Michael Cox, Chairman and Chief Executive Officer of airBaltic’s restructuring adviser Seabury Global Advisors, stated in a declaration submitted to the court that retaining surplus aircraft would impose unnecessary costs on the company without providing corresponding economic benefits.
At the same time, the airline plans to continue reducing its fleet, including by returning additional leased aircraft and surplus spare engines.
The assessment of the company’s long-term fleet requirements is still ongoing.
According to information submitted to the court,
airBaltic’s fleet consists of 54 Airbus A220-300 aircraft, of which 46 are leased and eight are owned by the company.
The airline also owns seven spare engines, leases four under operating lease agreements and another three under finance lease agreements.
As previously reported, airBaltic filed a motion with the US court on the 30th of October seeking to reject the leases of six Airbus A220-300 aircraft, requesting that the rejection take effect from the 17th of November.
Consequently, the airline has so far sought permission to terminate lease agreements for a total of nine aircraft as part of its restructuring process.
It was also previously reported that, on the 19th of October, the US Bankruptcy Court for the Southern District of New York approved airBaltic’s debtor-in-possession (DIP) financing structure of up to 350 million euros and confirmed the transparency of the financing process.
The approved financing arrangement provides for an initial tranche of 175 million euros, a second tranche of up to 125 million euros and a third tranche of up to 50 million euros.
airBaltic used 78.925 million euros from the first DIP financing tranche to purchase eight Airbus A220 aircraft and seven engines.
Overall, airBaltic has received binding commitments from lenders to provide up to 350 million euros in new DIP financing to support the company’s liquidity and operations during its Chapter 11 proceedings.
The financing was arranged by SVP, with commitments from Barclays, Hayfin Capital Management, Morgan Stanley, Oaktree Capital Management and Strategic Value Partners.
The interest rate is SOFR plus 8%, currently approximately 12%. However, the financing arrangement also involves additional fees of up to 52.5 million euros.
Previously, airBaltic had planned to raise up to 257 million euros from bondholders at an annual interest rate of 25%, but this financing plan will not proceed.
Chapter 11 protection shields airBaltic from creditors’ claims until the restructuring of its liabilities is completed.
The company has also stated that flights and customer services will continue as normal.
All flights will operate according to the planned schedule, existing tickets and reservations remain valid, and passengers can continue purchasing tickets and travelling with airBaltic as before.
A reorganisation plan will be developed as part of the Chapter 11 process and will require court approval.
The process is expected to be completed by mid-2027.
Last year, airBaltic Group’s turnover increased by 4.2% compared with 2024, reaching 779.344 million euros.
Meanwhile, the group’s losses amounted to 44.337 million euros, approximately 2.7 times lower than in 2024.
In 2025, the airline carried a total of 5.2 million passengers, an increase of 1% compared with 2024.
Last summer, Germany’s national airline Lufthansa became a shareholder in airBaltic.
Currently, the Latvian state owns 88.37% of airBaltic’s shares, Lufthansa holds 10%, Aircraft Leasing 1, a company owned by Danish financial investor Lars Thuesen, holds 1.62%, and other shareholders own the remaining 0.01%.
The company’s share capital amounts to 41.819 million euros.