airBaltic asks court to let it exit leases on three more aircraft

Latvia's national carrier airBaltic, currently undergoing restructuring under US Chapter 11 bankruptcy protection, filed a motion in a New York court on 6 November seeking permission to reject three aircraft leases. The company wants the rejection to take effect from 25 November. Together with an earlier motion, the airline is now seeking to exit leases on nine aircraft as part of shrinking its fleet.

Which aircraft are affected

The motion covers aircraft registered YL-CSN, YL-CSL and YL-CSM. According to the LETA news agency archive, the airline received them in autumn 2018: YL-CSN at the end of September, YL-CSL in November (painted in the colours of the Latvian flag to mark the country's centenary), and YL-CSM in early December. YL-CSN is leased from Ireland-registered MACH AOE 2 Designated Activity Company, the other two from EOS Aviation 18 (Ireland) Limited. All three airframes are at Riga airport, while one engine each from YL-CSN and YL-CSM is at a Collins Aerospace facility in Toulouse, France.

Why the airline is pulling out

The airline says a long-term fleet review found these aircraft no longer fit its future fleet and business plan, and that the lease costs exceed current market rates for comparable aircraft. Michael Cox, head of restructuring adviser Seabury Global Advisors, said in a court declaration that keeping surplus aircraft would create unnecessary costs without adequate economic benefit.

The hearing is scheduled for 9 December, so the company is asking for approval with an earlier effective date. Objections can be filed until 2 December.

Fleet and financing

According to court filings, airBaltic's fleet has 54 Airbus A220-300 aircraft, of which 46 are leased and eight owned. The company plans to keep reducing the fleet, including returning more leased aircraft and surplus spare engines.

On 19 October the court approved a debtor-in-possession (DIP) financing structure of up to €350 million, a loan used during restructuring. The airline used €78.925 million of the first tranche to buy out eight aircraft and seven engines. The interest rate is SOFR +8%, currently about 12%.

The airline says flights operate as planned and existing tickets and bookings remain valid. The process is expected to conclude in mid-2027. The Latvian state owns 88.37% of the shares and Lufthansa 10%.