airBaltic asks for state loan due to fuel prices

Latvia’s national airline, airBaltic, has requested a short-term loan from the Ministry of Transport. The airline cites the rise in aviation fuel prices caused by the military conflict in the Middle East as the reason for its request, according to airBaltic's statement on 31st March.

 The amount of the requested loan has not yet been disclosed, but it was reported in mid-March that 100–150 million euros might be needed.

"Having received and reviewed airBaltic’s letter regarding the need to grant a short-term loan as one of the possible preventive stabilisation measures, I have proposed that this matter be considered at today’s Cabinet meeting. It is essential to ensure the company’s uninterrupted operations at a time when external factors are having a particularly strong impact on the aviation sector,” said Transport Minister Atis Švinka (Progressives).

The company continues to operate flights according to its scheduled program, and a potential loan, if granted, would allow it to maintain a stable flight network, avoiding sudden changes and absorbing the pressure of rising fuel prices, the Ministry of Transport explained.

At the same time, the Ministry of Transport said that no decisions have been made regarding the potential allocation of funding at this time. The matter will be reviewed in accordance with regulatory requirements, and a decision on potential funding will depend on further evaluation and the receipt of all necessary approvals.

For safety reasons, airBaltic had previously been forced to suspend flights to Tel Aviv and Dubai, which reduced revenue and impacted the efficiency of its route network. At the same time, aviation fuel prices in the Gulf region, which accounts for approximately one-third of the global market, have risen significantly due to the conflict, at times approaching a doubling in cost.