The Latvian national airline airBaltic, considering the huge losses of 44.3 million euros in 2025, has suspended its initial public offering (IPO) and is currently not considering it as a potential source of capital in 2026, according to the company's annual report.
Something is wrong with the cash flow
The report intricately notes that the airline will operate with a negative free cash flow in 2026. Clearly, this refers to new losses.
Given the current forecasts, management expects that an additional infusion of funds ranging from 100 to 150 million euros will be required to finance operations in the winter season of 2026/2027.
Until new financing is obtained, the airline plans to continue operating in cash-saving mode in 2026. At the same time, with the support of the Latvian government, the company is looking for funds elsewhere, including through mergers and acquisitions.
To this end, they want to attract an international financial consulting firm. The task of the financial consultant will be to find and evaluate potential investors, as well as to structure the capital-raising deal.
Time to take tests
At the same time, airBaltic has engaged a strategic industry consulting firm to conduct a comprehensive analysis of the company's commercial strategy and operations in order to develop and update a business plan that will accelerate the return to profitability.
It is worth noting that the miracle investor airBaltic has been seeking almost since its inception. As for business plans, there have been quite a few. Including the well-publicized plan of the former head of the airline, Martin Gauss, who was dismissed last year.
At the same time, taxpayers need to prepare for further infusions into the scandalous airline – if new external financing cannot be obtained in 2026, airBaltic's management will turn to the state. The report states that the Latvian government, as the largest shareholder, has historically shown support for the airline.
If additional financing is not obtained from new investors or shareholders, management will begin negotiations with key suppliers, financial institutions, and leasing companies to extend payment terms or defer them to maintain a sufficient level of liquidity for the airline's operations in the fourth quarter of 2026 and the first quarter of 2027. This will allow for continued fundraising efforts in 2027.
Not subject to recovery
The fleet of the Latvian national airline airBaltic has decreased by one Airbus A220-300, as the aircraft sustained serious thermal damage during maintenance last June.
As a result, in 2025, the airBaltic group incurred losses of 6.2 million euros, according to the company's annual report.
The head of public and political relations at airBaltic, Augusts Zilberts, reported that in 2025, during maintenance while checking the operation of the auxiliary engine on the ground in Riga, the Airbus A220-300 with registration number YL-AAO sustained significant thermal damage in the area of the wing and fuselage attachment – in the ozone filter equipment.
After assessment, Airbus representatives concluded that the recovery of the aircraft was economically unfeasible.
There are no guilty parties – the investigation into the incident showed that maintenance was carried out in accordance with all applicable procedures. Following this incident, Airbus has supplemented the relevant maintenance recommendations for all A220-type aircraft.
Zilberts also noted that the aircraft was acquired through operational leasing and was insured. An insurance claim has been filed regarding the incident, which is currently under review.
He added that the catalog price of one Airbus A220-300 is about 90 million euros, but this figure is indicative, as the actual price may vary significantly depending on the order volume, aircraft configuration, individual terms with the manufacturer, market situation, and other factors.
How did the loss of a plane worth up to 90 million euros result in losses of only 6 million? It is unclear. Currently, the airline's fleet consists of 53 aircraft. So the repair crews have a large margin for experimentation.
The company plans to form a fleet of 99 aircraft by 2032. If, of course, the company still exists by then.
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