US court approves start of airBaltic's financial restructuring

The bankruptcy court for the Southern District of New York in the United States approved on Tuesday, September 15, the start of a financial restructuring process for Latvia's national airline airBaltic. The process is being carried out under Chapter 11 of the US bankruptcy code, a legal mechanism designed to allow companies to reorganize debts and financial obligations while remaining operational.

Announcement after cabinet meeting

The news of the court's decision was shared by Prime Minister Andris Kulbergs, of the United List party, following Tuesday's government session. He confirmed that the US court had given approval for the restructuring process to begin in airBaltic's case.

What Chapter 11 means

Chapter 11 is a provision of US bankruptcy law that allows companies to continue operating while renegotiating their financial obligations with creditors. It is commonly used by international companies with ties to the US market, enabling a business to keep functioning under court supervision while a plan for restructuring debt is worked out.

Background

airBaltic is Latvia's state-owned national airline, which has faced financial difficulties over an extended period. The court's approval marks a formal step toward reorganizing the company's financial obligations, though further details on the scope of the restructuring, its impact on operations, or the expected timeline have not yet been made public.