The Latvian Aviation Trade Union (LAA) is calling on Latvia’s national airline airBaltic to reach an agreement on social guarantees and a package of social measures for employees who could potentially be laid off, in light of the operational optimisation and fleet reduction envisaged in the airline’s business plan, LAA reports.
The union met with airBaltic management on Friday, on the 14th of August. According to the union, airBaltic expressed its willingness to comply with the minimum requirements set out in Latvia’s Labour Law – to notify the union of an already adopted decision on collective redundancies and to consult only on that decision.
At the same time, no agreement was reached on access to information contained in the business plan or on the terms of a confidentiality agreement.
The union stresses that consultations conducted without full and timely information about the business plan cannot be meaningful and do not meet the purpose of consultation laid down in Latvia’s Labour Law and European Union (EU) law – namely, to reach an agreement based on a shared understanding of the actual situation.
LAA is calling on airBaltic management to comply with the other legal requirements as well,
including those concerning reaching an agreement with the trade union.
Under Latvia’s Labour Law, an employer planning collective redundancies must begin consultations with employee representatives in good time in order to reach an agreement on the number of employees affected, the procedure for implementing the redundancies and the social guarantees available to employees who are laid off. The law also stipulates that, during consultations, the employer and employee representatives must consider all possible ways of avoiding collective redundancies or reducing the number of employees affected, as well as ways of mitigating the consequences through social measures that could enable dismissed employees to remain in employment or undergo retraining.
LAA states that the consultation process should result in a signed agreement covering all matters provided for by law, rather than merely notifying the union of a decision that has already been made. The union insists on the need to sign an agreement setting out clearly defined guarantees and a package of social measures in order to avoid a repeat of the experience during the Covid-19 pandemic crisis in 2020, when individual severance guarantees were allegedly offered to employees only if they signed agreements terminating their employment relationships.
The union also claims that dismissed employees were not reinstated in accordance with the terms of the agreement. Instead, the reinstatement process was allegedly used as a new recruitment procedure, with employees deemed undesirable by management not being rehired.
During the meeting, LAA also reiterated that
consultations on reducing staff numbers cannot be meaningful unless the parties share a common understanding
of the business plan and the assumptions on which it is based. This is a prerequisite for the union to assess alternatives to redundancies or propose solutions to reduce the number of employees affected, as required by law.
LAA reports that airBaltic proposed signing a non-disclosure agreement (NDA) covering the consultation process. Following an initial assessment of the document, LAA concluded that the restrictions contained in the proposed version were so extensive and restrictive to trade union activities that no trade union could reasonably sign it.
LAA points out that Latvia’s Labour Law already imposes a direct statutory duty of confidentiality on employee representatives with regard to an employer’s trade secrets, and that this obligation does not require the signing of a separate, broad NDA. The law stipulates that employee representatives and experts assisting them are obliged not to disclose information obtained by them that constitutes the employer’s trade secrets.
Given that the law already provides for confidentiality rules that are proportionate and appropriate to their purpose,
LAA believes that a broad NDA covering all trade union activities is unnecessary
and could be used as a tool to effectively prevent the union from performing its functions.
During the meeting, LAA proposed signing a precisely defined confidentiality agreement applying solely to the specific business plan, while also arranging a meeting with the decision-makers involved in drafting the business plan in order to jointly assess the plan and its potential impact on employees.
LAA sees several prerequisites and objectives for further negotiations with airBaltic. These include holding an open discussion on the details of the business plan while signing a mutually acceptable NDA, safeguarding the rights of employee representatives, concluding a written agreement as a mandatory outcome of the consultation process, providing substantial social protection guarantees rather than merely the statutory minimum, and ensuring that employees in certified professions are able to maintain their professional qualifications.
As BNN previously reported, airBaltic’s Supervisory Board has approved a business plan that, among other measures aimed at improving liquidity, envisages raising 225 million euros in interim financing using the existing collateral package securing the airline’s senior bonds due in 2029.
In the longer term,
the plan envisages recapitalising the company through up to 225 million euros in new debt
and 100 million euros in new equity. Part of the existing 2029 bonds would be converted into equity in the company, while the remaining portion would be replaced with new, reduced debt of up to 125 million euros.
The business plan also provides for the airline to operate 36 Airbus A220-300 aircraft by the end of 2026, compared with 54 aircraft currently, with the fleet gradually increasing to approximately 40 aircraft by 2031.
At an extraordinary meeting on the 14th of August, the government approved in principle three decisions concerning the financial stabilisation of airBaltic, which will still require approval by the Saeima, Latvia’s parliament.
Among other measures, the government will ask the Saeima for authorisation allowing the state to potentially participate in the purchase of airBaltic interim financing bonds worth up to 30 million euros, alongside private investors and on identical terms.
The Cabinet of Ministers would then be able to adopt a separate decision on purchasing the bonds if necessary.
There are also plans to convert claims arising from the state loan and bonds already held by the state into the company’s share capital. This means that 50 million euros worth of state-owned bonds and the remaining loan balance of more than 17 million euros are planned to be converted into shares in airBaltic.
The government also approved in principle an extension of the repayment deadline for a 30 million euros state loan from the end of August until the end of this year. By the 24th of July, airBaltic had repaid a total of 12.9 million euros in principal and contractual interest payments on the state loan.
As previously reported, airBaltic Group’s revenue increased by 4.2% last year compared with 2024, reaching 779.344 million euros. Meanwhile, the group posted a loss of 44.337 million euros last year, 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, German flag carrier 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 businessman and financial investor Lars Thuesen, holds 1.62%, while other shareholders own the remaining 0.01%. The company’s share capital amounts to 41.819 million euros.
In view of its 2025 financial results and current market conditions, airBaltic has suspended its potential initial public offering (IPO) and does not currently consider it a potential source of capital in 2026, according to airBaltic’s annual report.
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