The international credit rating agency Fitch Ratings (“Fitch”) has downgraded the long-term Issuer Default Rating (IDR) of Latvia’s national airline airBaltic from “B–”/negative to “CCC+”, according to Fitch’s announcement.
Fitch has also downgraded airBaltic’s senior secured long-term notes worth €380 million from “B–” to “CCC+”. The recovery rating remains “RR3”.
The downgrade reflects a higher-than-expected level of indebtedness and weaker financial flexibility, which will require significant external financing over the next 12 months. It also highlights uncertainty surrounding the planned IPO timeline and expected proceeds. The company’s 2025 operating performance has been weaker than anticipated, as operating costs have increased and profitability has remained low, contributing to significantly negative free cash flow and constrained liquidity.
The IDR reflects airBaltic’s weak financial metrics, driven by its high lease-related debt used to finance fleet expansion. Fitch notes that the rating’s strengths include the airline’s leading position in the Baltic region, its new-generation, fuel-efficient fleet, and the diversification of its business operations.
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