The national airline of Latvia “airBaltic“, taking into account the financial results of 2025 and the market situation, has suspended the possible initial public offering (IPO) of shares and currently does not consider it a potential source of capital in 2026, according to the annual report of “airBaltic”.
The report notes that despite the expected improvement in operational and commercial performance, the airline will operate with negative free cash flow in 2026, and based on current forecasts, management expects that to finance operations in 2026/2027. an additional cash injection of 100 to 150 million euros will be required for the winter season of 2018.
Until new financing – capital or otherwise – is received, the airline plans to continue operating in cash-saving mode in 2026. At the same time, with the support of “airBaltic’s” largest shareholder – the Latvian government, “airBaltic” is looking for opportunities to attract new capital from alternative sources, including through “M&A” or merger and takeover transactions.
To support this process, the group intends to engage and has begun the selection process of an international financial advisory firm with relevant expertise in the aviation industry. The role of the financial consultant will be to identify and evaluate potential investors and structure an appropriate capital raising transaction.
At the same time, airBaltic has engaged a strategic industry consulting firm to conduct a comprehensive review of its commercial strategy and operations in order to develop and revise a business plan that will accelerate the return to profitability.
However, if no new external financing is available in 2026, “airBaltic” management will turn to the current shareholders to receive additional financing. The report states that the Latvian government, as the largest shareholder of airBaltic, has historically demonstrated support for the airline, however, additional investments would only be possible if they were in accordance with European Union (EU) state aid regulations.
If additional financing is not available from either new investors or shareholders, management will enter into negotiations with key suppliers, financial institutions and lessors to agree on payment term extensions or payment deferrals in order to maintain a sufficient level of liquidity for the airline’s operations in the fourth quarter of 2026 and the first quarter of 2027, thereby providing an opportunity to seek additional financing in 2027.
It has already been reported that the losses of the “airBaltic” group last year amounted to 44.337 million euros, which is 2.7 times less than in 2024. On the other hand, the turnover of “airBaltic” concern last year, compared to 2024, increased by 4.2% and was 779.344 million euros.
In 2025, the airline carried a total of 5.2 million passengers on the airline’s route network, which is 1% more than in 2024.
On the other hand, the total number of flights operated, including aircraft full service rental services, or ACMI, was 78,400 last year, which is an increase of 7%. Among them, 48,300 flights were made on the airline’s route network, which is 3% more than in 2024, while 30,100 were ACMI flights, which is 15% more.
At the end of August last year, the German national airline “Lufthansa” became a shareholder of “airBaltic”. Currently, the Latvian state owns 88.37% of the shares of “airBaltic”, “Lufthansa” – 10%, “Aircraft Leasing 1” owned by the financial investor, Danish businessman Lars Tūsen – 1.62%, and 0.01% – others. The company’s share capital is 41.819 million euros.
After the initial public offering (IPO) of “airBaltic” shares, the size of Lufthansa’s participation will be determined by the potential IPO market price. The deal also provides that Lufthansa will own no less than 5% of airBaltic’s capital after the potential IPO.
On August 30, 2024, the Latvian government agreed that the state should retain at least 25% plus one share in the capital of the company after the IPO of “airBaltic”. On the other hand, on August 19, 2025, the government decided that Latvia, like Germany’s “Lufthansa”, will make a co-investment of 14 million euros in “airBaltic” before the potential IPO.
