airBaltic Executive: Airline's Market Share Will Not Shrink Despite Route Adjustments

airBaltic representative Martinovs said he expects the airline's market share to remain unchanged, even though the number of destinations served may see some adjustments. He stressed that the carrier should focus on routes where it is strong and can meet demand, while capacity could gradually increase over time.

Asked whether airBaltic could become a serious regional player without flying eastward routes, Martinovs said the current business plan reflects the present situation rather than wishful thinking. He acknowledged that an end to the war in Ukraine and the reopening of neighboring markets to European carriers would benefit airBaltic, but said the plan remains viable long-term even if that does not happen. He noted that aviation is a high-risk business, so all forecasts should be treated with caution.

Financing process continues

airBaltic has reached an agreement with some existing bondholders and third-party financiers on terms for bridge financing of up to €257 million, though approval from bondholders and shareholders is still required. A bondholder meeting to review the proposal is scheduled for September 11. Once approved, €180 million is expected to become available shortly afterward, with the remaining €77 million contingent on additional conditions being met. The new bonds would mature in February 2027, carrying a 25% annual interest rate.

The business plan also envisions a long-term recapitalization of the company and a reduction of its fleet from 54 to 36 Airbus A220-300 aircraft by the end of next year, gradually growing to about 40 aircraft by 2031.

State support and financial results

In August, the president promulgated legislation allowing the government to participate in airBaltic's bridge bond issuance for up to €30 million and to convert state claims into company equity. The government also extended the repayment deadline for its state loan to the airline.

Last year, airBaltic's revenue grew 4.2% to €779.3 million, while losses fell to €44.3 million. The airline carried 5.2 million passengers. airBaltic has currently paused plans for a potential share offering.