Air Baltic Corporation AS, together with Air Baltic Training, SIA and Baltijas Kravu Centrs SIA, filed voluntary chapter 11 petitions in the United States Bankruptcy Court for the Southern District of New York on September 14, 2026. The petitions were supported by a 69-page declaration of the company's chief financial officer filed the same day. The cases are pending before Judge Lisa G. Beckerman under Case No. 26-12188, with joint administration requested. The docket records that the case was designated as a mega case under Local Bankruptcy Rule 1073-1.

The declaration describes the company as the flagship airline of Latvia and the leading airline in the Baltic states, operating as a hybrid carrier. It attributes the filing to a sequence of external shocks culminating in a jet fuel price spike that reached a company carrying no fuel hedges.

Schedule 4 to the declaration reports total assets of approximately $1.8 billion against total liabilities of approximately $2 billion as of June 30, 2026, on a basis the schedule states is consolidated among affiliated debtors and non-debtors.

Air Baltic Corporation AS is a Latvian joint stock company established on February 8, 1995 and is the direct parent of the other debtors. The debtors' service address is Tehnikas Street 3, Lidosta “Riga,” Mārupe Parish, Mārupe District, LV-1053, Latvia.

As of the petition date the company operated fifty-four Airbus A220-300 aircraft, a single-type fleet maintained since 2020, which the declaration states makes it the largest A220 operator in Europe. The declaration states that none of the operating fleet is owned outright: the entire fleet is leased from third-party lessors other than eight aircraft financed under finance leases.

The declaration reports that the company employs approximately 3,000 people of more than thirty nationalities, approximately 93% of them in Latvia, with 198 employees in Estonia and Lithuania representing approximately 7%. Approximately 10% belong to one of four trade unions. The declaration states there are two collective bargaining agreements and that there has been no work stoppage since operations began.

Ownership

Shares are administered through Nasdaq CSD. The declaration reports that the two largest shareholders are the Latvian Ministry of Transport, at approximately 88%, and Lufthansa, at approximately 10%. Three of the five supervisory board members are selected by the Ministry as majority shareholder, a number the declaration states falls to one if its holdings drop below 25% of outstanding shares; the remaining two are appointed by Lufthansa and by a minority shareholder holding less than two percent.

The declaration reports 2025 total passenger revenue of approximately €593 million ($687.9 million), comprising €549 million ($636.8 million) in ticket revenue and €44 million ($51 million) in ancillary revenue, or approximately 76.9% of total operating revenue, against 77.1% in 2024. Leasing revenue under ACMI arrangements grew from approximately €77 million ($89.3 million) in 2022, or 15% of total operating revenue, to approximately €157 million ($182.1 million) in 2025, or 20.3%, on an average of 14.1 aircraft deployed.

Revenue rose in every year from 2021 through 2025 on the figures the declaration reports, and the company posted a positive net result in only one of the seven years shown.

The declaration sets out a history of repeated recapitalization by the company's principal shareholder.

The declaration states that a contemplated initial public offering on Nasdaq Riga and the Frankfurt Stock Exchange targeted an estimated €250 million ($290 million) primary capital raise, and that the timeline shifted repeatedly as European airline share prices declined.

The declaration identifies fuel as the proximate trigger for the filing. The company entered 2026 assuming a jet fuel price of approximately $685 per ton. Following the outbreak of the Iran-U.S. conflict in early 2026, prices peaked at approximately $2,000 per ton, which the declaration states is roughly three times the budgeted figure and approximately 109% above January 2026 levels. The actual average price for the first eight months of 2026 was $1,168 per ton, a $454 increase over the same period in 2025.

The declaration states the company was 90% unhedged for fuel and that every $100 increase per ton raised costs by approximately $16.5 million, a sensitivity it states is based on expected consumption of 165 thousand tons for April through December 2026. It states that fuel historically represents approximately 20% to 27% of total operating expenses, and that services to Tel Aviv and Dubai were temporarily ceased, with Dubai service not resumed as of the filing.

On August 17, 2026 bondholders approved resolutions converting the August 14 and November 14, 2026 cash coupons to payment-in-kind and addressing the €25 million ($29 million) minimum liquidity covenant; the declaration describes this treatment in one place as a suspension and in another as a waiver of certain minimum liquidity covenants. The declaration states that the 2029 bonds were quoted in the mid-93s in late January 2026 and in the 20s by August 2026, which it states effectively foreclosed any realistic prospect of refinancing or extending the funded debt out of court.

The declaration reports aggregate funded debt of approximately €503.3 million ($583.9 million) as of the petition date, of which approximately €484.7 million ($562.3 million) was secured.

The bond line reflects approximately €393.8 million ($456.8 million) of principal plus approximately €4.4 million ($5.1 million) of accrued and unpaid interest. The bonds were issued on May 14, 2024 in an aggregate principal amount of €340 million ($394.4 million), with an October 2024 tap issuance of a further €40 million ($46.4 million), and are admitted to the Euronext Dublin Official List. U.S. Bank Trustees Limited is identified as holder of the bond debt on the debtors' schedules, and the declaration refers to a bond trustee in connection with the August 2026 consent solicitation.

The finance lease figure is stated two ways in the declaration. The capital structure summary table reports approximately €78.6 million ($91.2 million); the narrative paragraph describing the leases reports approximately €78.3 million ($90.8 million). Both are reproduced above rather than reconciled. The leases cover eight aircraft, seven spare engines and a flight simulator. The declaration defines the equipment subject to the Export Development Canada mortgages as the finance-leased aircraft and the spare engines; the flight simulator is described separately, and the declaration does not state that the mortgages extend to it.

The BluOr Bank facility was issued in August 2025 as a €10 million ($11.6 million) five-year facility bearing six-month EURIBOR plus a fixed margin of 5.5%, maturing July 2030, to refinance construction of the cargo hangar at Riga International Airport. The government loan figure reflects the April 2026 €30 million ($34.8 million) loan after approximately €12.9 million ($15 million) of principal and interest had been repaid by July 2026.

The declaration's schedule of largest unsecured creditors identifies the following claims. The schedule is captioned as a list of the twenty largest unsecured creditors, while the body of the declaration describes the consolidated list as covering the thirty largest; the discrepancy appears in the document as filed.

The declaration separately identifies Pratt & Whitney as the single largest unsecured creditor. The engine manufacturer appears in the declaration in two capacities: as the largest unsecured claimant, and as the supplier of the PW1500G, which the declaration states is the only engine certified for the A220-300. The declaration attributes an unprecedented spare-engine shortage to a powdered-metal issue affecting that engine, with average aircraft-on-ground of 8.0 in the 2024 summer season and 7.7 in 2025, against a quarterly average that peaked at 13.

The declaration states that the company engaged restructuring professionals in the spring of 2026 and developed a business plan intended to increase liquidity by restructuring obligations and reducing debt. The plan has not been approved by the court and its implementation, as the declaration describes it, depends on consents the debtors had not obtained as of the filing.

The declaration identifies thirteen first day motions and applications filed alongside the petitions, addressing enforcement of the automatic stay, case management procedures, the creditor matrix and redaction of personal identifying information, joint administration, an extension of time to file schedules and statements, retention of a claims and noticing agent, cash management, assumption of critical airline agreements, customer programs, payment of non-U.S. vendor and lien claimant claims, insurance, taxes and employee wage obligations. A motion for postpetition financing was filed contemporaneously and separately.

The docket records that on September 16, 2026 the court entered interim or final orders disposing of each of the first day pleadings, together with an interim order on the financing motion.

The cases are pending in the United States Bankruptcy Court for the Southern District of New York, Case No. 26-12188, before Judge Lisa G. Beckerman. Milbank LLP appears on the declaration as proposed counsel to the debtors and debtors in possession.

The declaration states that the debtors retained Seabury Securities LLC and Milbank LLP to assist in evaluating strategic alternatives. The declaration does not assign Seabury a titled role, and no retention application for that firm appeared on the docket through September 18, 2026.

By order entered September 16, 2026, the court approved the appointment of Epiq Corporate Restructuring, LLC as claims and noticing agent nunc pro tunc to the petition date. The debtors' schedules state that no official committees were formed prepetition, and the case record shows no official committee of unsecured creditors appointed as of September 18, 2026.