AS Air Baltic Corporation (airBaltic) filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York on September 14, 2026, as part of a financial restructuring aimed at reducing debt and strengthening its liquidity position. airBaltic is the flag carrier of Latvia and was founded in 1995.

The filing follows continued financial pressure stemming from elevated debt levels, geopolitical challenges, higher fuel costs, and engine availability issues affecting its Airbus A220-300 fleet. The company said its restructuring plans include reducing its fleet to around 36 aircraft from 54 by year-end 2026. It will also return approximately 20 aircraft to lessors while seeking to renegotiate certain lease obligations. The company has secured a commitment for EUR350 million of debtor-in-possession financing, subject to court approval, to support operations during the restructuring process. Flights are expected to continue operating as scheduled during the Chapter 11 proceedings.

KBRA-rated aviation asset-backed securities (ABS) currently have no exposure to airBaltic. More broadly, Airbus A220 aircraft have had limited representation in aviation ABS transactions compared with more widely securitized narrowbody aircraft, such as the Airbus A320 and Boeing 737 families.

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