Latvian carrier is preparing to cut up to 23% of its workforce across the Baltic region as part of restructuring efforts following its Chapter 11 bankruptcy filing.
Air Baltic is planning workforce reductions affecting between 500 and 700 positions across its bases in Riga, Vilnius and Tallinn as it adapts to a revised business model.
The airline currently employs around 3,000 staff across the Baltic states, meaning the proposed cuts represent up to 23% of its total workforce.
Air Baltic states that the final number of redundancies remains subject to ongoing consultations with trade unions regarding potential reduced workload arrangements for flight deck and cabin crew. Updated organisational structures for remaining functions are expected to be defined by mid-October.
The carrier has notified Latvia’s State Employment Agency of the collective redundancy process.
“We recognise that this is an important and sensitive process for our people,” says Air Baltic chief executive Erno Hilden. “Our priority is to handle it with transparency, respect and care, while keeping our employees informed as the process progresses.”
The airline notes that no individual decisions have been made and stresses that current flight schedules remain unaffected, with operations continuing as normal.
The staff cuts form part of a broader package of measures under a revised business strategy aimed at prioritising financial stability and cost efficiency over broad expansion.
Under the revised strategy, announced in August, Air Baltic is implementing a significant fleet-reduction plan. The carrier, which operates 54 Airbus A220-300s, intends to shrink its fleet to 36 aircraft by the end of the year before gradually expanding to around 41 A220s by 2031.
This represents a major departure from the airline’s previous long-term goal of building a 100-strong fleet ahead of a planned initial public offering.
Management attributes the strategic shift to moderated market demand, geopolitical instability in Ukraine and the Middle East, and ongoing operational constraints linked to Pratt & Whitney GTF engine issues.
To bolster profitability, Air Baltic is refocusing its route network on its primary Riga hub while expanding year-round aircraft, crew, maintenance and insurance (ACMI) partnerships. The carrier is targeting €45 million ($52 million) in recurring annual cost savings.
The workforce adjustments follow Air Baltic’s decision last month to file voluntarily for Chapter 11 protection in the Southern District of New York bankruptcy court.
The filing aims to provide a structured framework to renegotiate agreements with creditors and aircraft lessors. The carrier expects to complete the Chapter 11 process by June 2027.
To maintain liquidity during the reorganisation, Air Baltic secured commitments for €350 million in debtor-in-possession financing at an interest rate of around 12%, backed by investors including Oaktree Capital Management, Morgan Stanley, Barclays, SVP and Hayden Capital Management.
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