Latvia’s national airline, airBaltic, is at a crossroads. Years of planning to go public have stalled, and the government now signals that the carrier’s survival may depend on attracting private investors in the months ahead. The pressure is mounting: without new funding by mid-2026, the airline’s operations could be at serious risk.
airBaltic has begun engaging advisers to explore a sale of part of the company to external investors. The move comes after repeated delays to its planned initial public offering (IPO), which the airline had originally hoped to launch in 2025. Market conditions and concerns about financial performance have made the public listing increasingly uncertain, leaving the company to seek alternative paths to secure capital.
Finance Minister Arvils Ašeradens has publicly supported this approach. In an interview on Latvian Television, he said that pursuing private investors is “a more appropriate course of action at the moment than going public.” He was clear about the urgency of the situation. “It seems this is a matter for the first half of the year, and we must hope that it will happen,” Ašeradens said.
The government’s shift in strategy marks a significant departure from earlier plans. For years, an IPO was viewed as the primary way to inject fresh capital into airBaltic while reducing the state’s majority stake. Now, with the listing delayed and investor appetite uncertain, strategic stake sales are being considered as a faster, more reliable alternative.
Currently, the Latvian state owns roughly 88 percent of airBaltic, with German carrier Lufthansa holding 10 percent, and minority shareholders owning the remainder. Lufthansa’s stake stems from a 2025 investment of EUR 14 million, structured to convert into ordinary shares in the event of a future IPO. The German airline was also guaranteed to retain at least 5 percent post-listing.
Finance Minister Ašeradens highlighted the role of new CEO Erno Hilden in navigating these complex negotiations. Hilden, who joined airBaltic in December 2025 after years at SAS, was described by the minister as “convincing, pragmatic and realistic.” His leadership is expected to play a critical role in securing investor confidence.
Financially, airBaltic has shown modest improvement. The airline posted a profit of EUR 4.249 million in the first nine months of 2025, on turnover of EUR 594.303 million. While this marks a recovery from losses in 2024, analysts say the figures remain thin compared with the capital needed for fleet expansion and broader strategic ambitions.
Observers note that while profitability has returned, it is unlikely to be robust enough to attract widespread interest in a standalone IPO. This has made private stake sales a more attractive, immediate option, potentially bringing in both capital and strategic partners with operational expertise.
The Saeima Budget and Finance Committee will hold a closed session on 10 February 2026 to review airBaltic’s situation. Representatives from the Ministries of Transport and Finance, the State Treasury, and airBaltic management are expected to discuss funding options, the state’s role in ensuring the airline’s survival, and the best way forward.
Any transaction will also be subject to state safeguards. Officials have emphasised that the government intends to retain at least 25 percent plus one share in any equity deal, maintaining strategic control while allowing for external investment.
The months ahead will be crucial. With funding deadlines approaching and operational pressures ongoing, airBaltic’s leadership and the Latvian government must act decisively. How successfully they navigate this period may determine not just the airline’s financial future, but the stability of Latvia’s national carrier for years to come.
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Author: Edward Hardy
