The Latvian carrier is negotiating with labor unions to reduce its workforce as it enters Chapter 11 bankruptcy.
AirBaltic has entered talks with Latvian labor unions to trim its workforce as part of a broader restructuring plan that could see the airline file for Chapter 11 bankruptcy protection, the carrier’s chief executive announced on Wednesday.
Restructuring aims and financial pressures
CEO Martin Gauss said the airline is confronting a “significant cash‑flow gap” that threatens its ability to sustain operations without a formal insolvency process. The proposed cuts are intended to align staff levels with the reduced route network and lower operating costs.
AirBaltic, which has expanded rapidly since 2016, now serves more than 70 destinations across Europe, the Middle East and North America. The growth has been financed largely by debt, and the recent surge in fuel prices and weaker demand has strained the balance sheet.
Union negotiations and timeline
The airline’s management has approached the main trade unions representing pilots, cabin crew and ground staff to discuss voluntary redundancies, early retirement packages and potential wage adjustments. Gauss indicated that the discussions would aim for a “mutually agreeable” solution within the next few weeks.
Union leaders have expressed willingness to cooperate but stressed the need for transparent criteria and adequate compensation for affected employees. They also warned that any abrupt cuts could disrupt flight schedules and erode customer confidence.
Potential Chapter 11 filing
While AirBaltic has not filed for bankruptcy, Gauss said the company is preparing a “comprehensive restructuring plan” that could be submitted to a U.S. court if negotiations with creditors and unions do not yield sufficient relief. Chapter 11 would allow the airline to continue operating while it reorganizes its debts and contracts.
Analysts note that a Chapter 11 filing could provide AirBaltic with access to debtor‑in‑possession financing, but it would also subject the carrier to heightened regulatory scrutiny and could impact its slots at congested airports.
- Voluntary redundancy offers for eligible staff
- Early retirement incentives with enhanced pension benefits
- Potential temporary wage reductions
- Retraining programs for redeployed employees
“Our priority is to preserve the long‑term viability of AirBaltic while treating our employees fairly,” Gauss told reporters.
The outcome of the talks will shape the airline’s future trajectory and could set a precedent for other European carriers facing similar financial headwinds.