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Airlines are built to weather turbulence in the sky — but sometimes the storms on the ground prove far more destructive. Latvian carrier airBaltic filed for Chapter 11 bankruptcy protection in New York on Monday, citing liabilities exceeding $1 billion after years of compounding financial blows, from the COVID-19 pandemic to Russia's invasion of Ukraine to a sudden spike in jet fuel prices tied to the Iran-U.S. conflict that erupted in early 2026.

A Pandemic That Grounded Global Travel

According to a first-day declaration filed by the company's Chief Financial Officer, Vitolds Jakovļevs, the COVID-19 pandemic dealt the first major blow, devastating global air travel and forcing airBaltic to operate at just a fraction of its prepandemic capacity — a airline suddenly running on a fraction of the fuel that once powered its entire business.

Just as Recovery Began, Another Shock Hit

The timing could hardly have been worse. Just as the carrier started clawing its way back from pandemic losses, Russia's invasion of Ukraine in early 2022 forced airBaltic to permanently suspend routes to Russia, Belarus and Ukraine — markets that had historically generated substantial revenue for the airline. It was like watching a patient begin to recover, only to be struck by a second, unrelated illness before fully healing from the first.

Fuel Prices Deliver the Knockout Blow

Then came 2026, and with it, a third major financial shock: the outbreak of the Iran-U.S. conflict sent jet fuel prices soaring. In the immediate aftermath, fuel prices peaked at approximately $2,000 per metric ton — nearly three times their previous level, a spike steep enough to upend even a well-managed airline's cost structure overnight. The conflict also forced airBaltic to temporarily suspend service to Tel Aviv and Dubai, with the Dubai route still not restored.

Flying Through the Bankruptcy

Despite the Chapter 11 filing, airBaltic isn't grounding its operations. The airline plans to continue flying, selling tickets and serving customers throughout the restructuring process — proof that this filing is designed as a financial reset, not a shutdown.

The Financial Lifeline Keeping Planes in the Air

To keep operations running, airBaltic has secured approximately €350 million (about $404 million) in new financing from a consortium of lenders that includes Strategic Value Partners, Barclays, Hayfin Capital Management, Morgan Stanley and Oaktree Capital Management. The airline expects to complete its restructuring by June 2027, giving it roughly a year and a half to rebuild its financial footing while continuing to serve passengers.

The Legal Team Guiding the Restructuring

AirBaltic is represented by Evan R. Fleck, Jaimie Fedell, Andrew M. Leblanc and Erin E. Dexter of Milbank LLP. A representative of the debtor didn't immediately respond to a request for comment.

For an airline that survived a global pandemic and a war on its doorstep, it was ultimately the price of the fuel in its own tanks that pushed it into bankruptcy court — a reminder that even the sturdiest carriers can only absorb so many shocks before turning to the courts for a lifeline.