AirBaltic is restructuring operations with plans to reduce its fleet and focus on Riga as its primary hub airport.
The European carrier revealed a new revised business plan on Tuesday (11 August) as it looks to shore up its finances. This will see AirBaltic reduce its current fleet of 54 aircraft to 36 Airbus A220-300s by the end of this year but the carrier stressed that its current flight schedule "continues unaffected".
The airline will also reshape its network to “centre” around Riga, as the company shifts its priorities to focus primarily on financial stability, followed by “profitable” growth. AirBaltic currently has secondary bases at Tallinn in Estonia and Vilnius in Lithuania.
“The plan is designed to strengthen AirBaltic's long-term competitiveness, establish a sustainable capital structure, support its future development and maintain reliable connectivity for Latvia and the wider region,” said the carrier in a statement.
AirBaltic had previously focused on growth with ambitious plans to expand to 100 aircraft as it looked to launch an initial public offering (IPO) for the company. But these plans have been shelved due to “material changes” in the operating environment.
“Demand and revenue growth have moderated, geopolitical developments in Ukraine and the Middle East have increased uncertainty and operating costs, and prolonged Pratt & Whitney engine availability constraints have affected the airline’s ability to deploy its full fleet,” added AirBaltic.
After cutting its fleet in the coming months, AirBaltic only plans to add another four aircraft over the next five years, which would give it a fleet of 40 A220-300s by 2031.
AirBaltic expects scheduled capacity to “remain broadly stable through improved aircraft utilisation,” despite the reduction in the size of its fleet.
Erno Hildén, president and CEO of AirBaltic, added: “Every successful airline must continuously adapt to a changing market. This business plan is about making disciplined choices that strengthen AirBaltic’s long-term competitiveness while preserving what matters most — reliable connectivity and operations, together with financial sustainability.”
The airline, which counts Lufthansa Group as a minority shareholder, plans to secure €225 million in interim financing to address “near-term liquidity needs”, ahead of longer-term refinancing moves.