The Latvian government is set to review a request from national airline airBaltic for a short-term loan, the Ministry of Transport (SM) has announced.
According to the government’s agenda, the Cabinet of Ministers will consider an informational report on the current situation at airBaltic during a closed session.
The ministry stated that at the end of March, airBaltic formally approached it, informing the shareholder about the impact of external factors on the company’s financial and operational performance. The military conflict in the Middle East has led to a significant rise in aviation fuel prices, increasing costs and affecting profitability.
“Having received and assessed airBaltic’s request for a short-term loan as a potential preventive stabilisation instrument, I have proposed that the issue be reviewed at today’s Cabinet meeting,” said Transport Minister Atis Svinka.
He stressed the importance of ensuring the airline’s uninterrupted operations at a time when external factors were placing particular strain on the aviation sector.
The ministry noted that the airline continued to operate flights according to its planned schedule. If granted, the loan could help maintain a stable route network, avoiding abrupt changes and absorbing the pressure of rising fuel costs.
At the same time, SM emphasised that no decision had yet been made regarding the possible financing. The matter will be assessed in line with regulatory requirements, and any decision will depend on further evaluation and the necessary approvals.
The ministry also pointed out that, for security reasons, airBaltic had already suspended flights to Tel Aviv and Dubai, reducing revenues and affecting network efficiency. Meanwhile, aviation fuel prices in the Gulf region-which accounts for roughly one-third of the global market-have risen significantly due to the conflict, at times nearly doubling.
Work is also ongoing on a new business plan, expected to be finalised this summer.
A potential short-term loan could help stabilise operations until the implementation of the new plan begins. (BNN)