airBaltic expects a 10% reduction in flight capacity following a reduction in its fleet
The Latvian airline airBaltic plans to reduce its fleet by one-third by the end of the year—from 54 to 36 aircraft. At the same time, the total flight capacity—that is, the number of passengers the airline will be able to carry—will decrease by approximately 10%, said Vitolds Jakovlevs, a member of the company’s board of directors, in an interview on Latvian television.
airBaltic’s new business plan calls for reducing the number of destinations and focusing on the most profitable routes. According to Jakovlevs, the company aims to balance passenger volumes between the summer and winter seasons to avoid a significant drop in flights in November, January, and February following the peak summer season.
The carrier plans to increase flight frequency on profitable routes, while reducing flight frequency or nearly ceasing operations on less profitable routes. Jakovlevs noted that this approach should improve the airline’s operational efficiency.
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In addition, airBaltic needs to secure 225 million euros in bridge financing to support its operations and continue its financial restructuring. The terms of this financing have not yet been agreed upon. airBaltic CEO Andreis Martinovs stated that a group of private creditors, which submitted a proposal for such financing, is ready to provide the entire amount needed.
When asked whether bondholders would be able to secure short-term financing at a rate higher than 14.5% per annum on the company’s original bonds, Yakovlevs called this assumption reasonable given the risks involved in the deal.
