Latvia Approves $16.3M State Funding Boost for airBaltic

The Latvian government has approved an additional EUR14 million (USD16.3 million) capital injection into national carrier airBaltic (BT, Riga) to strengthen its financial position ahead of a long-anticipated initial public offering. The move follows a cabinet meeting on August 19, where Transport Minister Atis Švinka confirmed the state investment matches Lufthansa Group’s earlier EUR14 million contribution for a 10% stake in the airline.

Prime Minister Evika Siliņa said the state’s investment aligns with European Union rules because it is tied to private capital. Any independent state funding without private participation would be considered illegal state aid under EU competition law. According to Švinka, the funds will be reallocated from the budgets of the finance and transport ministries, and no additional state support is currently planned.

Earlier in 2025, Latvia reached out to Lithuania and Estonia about co-financing airBaltic. While Estonia declined, Lithuania is still reviewing the proposal. Although 97.97% owned by the Latvian government, airBaltic also maintains bases in Tallinn and Vilnius, serving as the largest airline for all three Baltic states.

The carrier has postponed its IPO, originally planned for 2025, to at least 2026 due to volatile market conditions. The airline hopes to raise fresh capital to support growth and refinance high-interest bonds issued in 2024 worth EUR380 million, carrying a steep 14.5% coupon. Lufthansa’s acquisition, recently cleared by Germany’s competition authority, is expected to close by the end of August. Currently, the only private shareholder is Aircraft Leasing 1, controlled by Danish investor Lars Thuesen, with a 2.03% stake.

Related News: https://airguide.info/category/air-travel-business/airline-finance/

Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com