Latvia’s national airline airBaltic needs to make changes in order to survive, but there is no reason to fear that flights will be suspended in the coming months, Eero Pärgmäe, a member of the management board of Tallinn Airport operator Tallinna Lennujaam, said in an interview with Estonian public television on Thursday.
He said there are two possible scenarios for airBaltic’s future.
“The first is that they will manage to complete the restructuring, continue operating with a smaller fleet and make the company profitable. The second scenario is that, at some point, it will be concluded that there is no place in the market for this kind of business model, that the major airlines have taken over the European market and that this smaller model no longer works. In that case, the company will be shut down,” Pärgmäe said.
In his assessment, the measures airBaltic is taking to reduce its fleet are a step in the right direction.
“Reducing the fleet is entirely reasonable. Here in the Baltic States, there is simply no use for a fleet of more than 35 aircraft — there is nowhere to deploy that many planes. So these measures are moving in the right direction. The question is whether they were taken in time,” Pärgmäe said.
airBaltic is the largest carrier at Tallinn Airport, with a market share of 29%.
Asked about the impact of the airline’s restructuring on Tallinn Airport, Pärgmäe said airBaltic aircraft are still operating according to schedule and tickets remain on sale.
However, the advance booking window for airBaltic has shortened — passengers are now booking tickets one or two months in advance, which is the period for which customers are currently willing to purchase tickets. Regarding January, the airline needs to provide additional explanations in order to strengthen market confidence, Pärgmäe said.
“If you ask me whether I would buy airBaltic tickets, then yes, I would — for the end of September. According to today’s flight schedule [from Tallinn], they are selling tickets on 12 routes. I think they will also continue flying during the winter. However, to make it through the winter, they will need both additional financial resources and positive signals to the market,” the Tallinn Airport management board member said.
He suggested that
airBaltic aircraft would likely operate somewhat less frequently from Tallinn during the winter season.
“airBaltic will most likely continue serving the so-called core routes that it has operated until now. If airBaltic reduces the number of flights, it will undoubtedly affect the market for some time. However, demand for air travel is currently strong. We can see that people want to fly, and I am completely confident that we will be able to introduce new routes to the market and attract new carriers,” Pärgmäe said.
He stressed that Tallinn Airport has deliberately sought to maintain as broad a portfolio of airlines as possible.
“For a small country like ours, having 15 scheduled carriers is a very good figure. If we look at our customer profile, 50% of our passengers travel through major hubs — Frankfurt, Helsinki, Copenhagen, Warsaw and Riga. This means that Estonia will by no means be left without air connections; such a problem will not arise,” Pärgmäe said.
The Tallinn Airport management board member predicted that low-cost airlines would see the strongest growth in the coming years.
He also noted that aviation fuel prices are having the greatest impact on airlines this year.
“If we look at last year, aviation fuel was 70–80% cheaper then. Because of the situation surrounding the Strait of Hormuz, aviation fuel remains very expensive. We can already see the consequences in the winter flight schedules — airlines are cutting longer and less heavily used routes that were operated last winter, simply because they are not profitable. Fuel is currently that expensive,” Pärgmäe concluded.
Pärgmäe is one of four members of the Tallinna Lennujaam management board and is responsible for commercial matters.
As previously reported, airBaltic’s Supervisory Board has approved a business plan that, among other measures aimed at improving liquidity, provides for raising 225 million euros in interim financing using the existing collateral pool securing the 2029 senior bonds.
In the longer term, the plan provides for the company’s recapitalisation through up to 225 million euros in new debt and 100 million euros in new equity. Part of the existing 2029 bonds will be converted into equity in the company, while
the remainder will 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.
The airBaltic Group’s revenue increased by 4.2% last year compared with 2024, reaching 779.344 million euros. Meanwhile, the Group recorded a loss of 44.337 million euros, 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. The Latvian state currently owns 88.37% of airBaltic’s shares, Lufthansa holds 10%, Aircraft Leasing 1, a company owned by Danish businessman Lars Thuesen, holds 1.62%, while other shareholders own the remaining 0.01%. The company’s share capital amounts to EUR 41.819 million.
Taking into account the 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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