airBaltic’s restructuring is entering a phase that will directly affect its employees. The Latvian airline estimates that the changes could impact between 500 and 700 jobs at its bases in Riga, Vilnius and Tallinn, representing roughly 17 to 23 percent of the company’s total workforce of around 3,000 employees.

According to information published by airBaltic on October 5, the final number of layoffs has not yet been determined. The company is currently negotiating with trade unions over the possibility of reduced workload arrangements for pilots and cabin crew, which could help limit the number of actual redundancies. At the same time, a new organisational structure is being prepared for other parts of the company, with details expected to be defined during October. Latvian public broadcaster LSM reports that the airline has already notified the country’s State Employment Agency about the planned collective redundancy process.

The workforce reduction, however, is only one consequence of a much broader change in airBaltic’s business model. The new business plan, presented in August, effectively marks a retreat from the airline’s previous strategy of aggressive expansion. The earlier plan, which had been linked to preparations for an initial public offering, envisaged growing the fleet to as many as 100 aircraft. According to Aviation Week and CAPA, the new strategy reduces that target to around 40 aircraft by the beginning of the next decade and defines the airline’s priorities under the principle of “financial stability first, growth second”.

From 54 to just 36 A220s by the end of the year

The most visible change will be the size of the fleet. airBaltic currently operates 54 Airbus A220-300s, while only around 36 are expected to remain within its operating model by the end of 2026. After that, the airline foresees only modest growth, reaching approximately 40 aircraft by 2031. This represents a fleet reduction of roughly one third within just a few months.

At the same time, Riga will be positioned even more firmly as the airline’s main hub. Vilnius and Tallinn will remain airBaltic bases, but with greater emphasis on selected point-to-point routes, while broader expansion from all three Baltic bases is no longer planned. The airline intends to focus capacity primarily on markets and routes where demand is sufficient and where acceptable profitability can be achieved.

According to the business plan cited by CAPA, scheduled capacity measured in available seat kilometres is expected to decline from approximately 9.6 billion ASKs in 2026 to 8.7 billion in 2027, before gradually increasing to around 10.5 billion by 2031. Despite operating significantly fewer aircraft, airBaltic believes it can retain a relatively large share of its current capacity by improving fleet utilisation.

ACMI operations are also expected to play a more important role. airBaltic has for years cooperated with other European airlines by providing aircraft together with crews, maintenance and insurance, and the new strategy sees ACMI as a way of reducing seasonality. Instead of leaving aircraft and crews underutilised during the weaker winter period, capacity can be placed with other airlines. According to CAPA, the combination of cost reductions, fleet changes and a revised commercial model is intended to generate approximately EUR 45 million in recurring annual financial improvements.

Chapter 11 provides the framework for a deeper restructuring

The cuts come less than a month after airBaltic voluntarily filed for Chapter 11 protection on September 14 with the US Bankruptcy Court for the Southern District of New York. Chapter 11 does not mean the airline is ceasing operations, but instead allows it to continue operating under court supervision while restructuring its liabilities and negotiating with creditors.

airBaltic itself announced that two days later the court approved the company’s key first-day motions, including the continuation of normal operations and access to the first EUR 140 million tranche of a total EUR 350 million debtor-in-possession financing package intended to maintain liquidity throughout the restructuring process. The financing is being provided by a group of investors and financial institutions including Barclays, Hayfin Capital Management, Morgan Stanley, Oaktree Capital Management and Strategic Value Partners.

For passengers, there are no immediate changes. airBaltic says that the flight schedule, ticket sales, existing bookings, vouchers, refunds and loyalty programme continue to operate normally, while salaries and other employee-related obligations can also continue to be paid during the process.

Reuters reports that one of the airline’s main challenges has been the combination of high debt, higher fuel costs and weaker financial resilience following earlier crises. airBaltic ended 2025 with a net loss of EUR 44.3 million on revenues of EUR 779.3 million, after having already accumulated substantial losses during the pandemic period. Another problem in recent years has been the limited availability of Pratt & Whitney engines for the A220, which prevented part of the fleet from being used normally.

Lufthansa remains a minority shareholder

airBaltic’s restructuring is also significant because of the company’s ownership structure. The Latvian state continues to control 88.37 percent of voting rights, while Deutsche Lufthansa holds 10 percent. The remaining 1.63 percent is held by other private shareholders. Lufthansa entered airBaltic as a strategic minority investor, but the current restructuring demonstrates how significantly the situation has changed compared with the period when airBaltic was preparing for an IPO and speaking about a future fleet of 100 A220s.

At the end of September, Latvian Prime Minister Andris Kulbergs described the Chapter 11 filing to Reuters as a form of “risk” through which the company is attempting to repair its balance sheet and become more attractive to a potential strategic partner. According to the same source, Latvia also provided airBaltic with a EUR 30 million emergency loan during the year, while the scope for further state support is constrained by European Union rules.

This is why the announced workforce reduction should not be viewed as an isolated cost-cutting measure, but rather as a logical consequence of the very different airBaltic that the company is now trying to build. An airline that until recently planned a fleet of 100 aircraft is now preparing to operate fewer than 40, focus more heavily on Riga, place part of its capacity through long-term ACMI agreements and reduce fixed costs.

If the plan is implemented as envisaged, airBaltic will emerge from the restructuring as a significantly smaller airline than previously expected, but the company is betting that a smaller fleet, simpler organisation and more disciplined growth will create a more sustainable business model. For between 500 and 700 employees, however, the price of that transformation could be the loss of their current jobs.