airBaltic has said its ongoing bankruptcy restructuring will have no impact on its cooperation with Air Serbia, including the wet-lease arrangement under which the Latvian carrier operates up to four Airbus A220-300 aircraft on behalf of its Serbian counterpart. Air Serbia has similarly confirmed that all planned operations under the agreement are continuing without changes. “The proceedings will have no impact on airBaltic’s partnership with Air Serbia. As planned, airBaltic will continue to provide Air Serbia with up to four Airbus A220-300 aircraft, together with crew, maintenance and insurance, under a wet-lease arrangement”, airBaltic said. Under a wet-lease, also known as ACMI, the operating airline provides the aircraft, crew, maintenance and insurance, while the contracting carrier retains commercial control of the flights, which operate under its own flight numbers.
Air Serbia also confirmed that the developments at airBaltic have not affected the arrangement. “The proceedings in question have no impact on the operational cooperation between Air Serbia and airBaltic, including flights operated by the Latvian carrier under the existing agreement. All planned operations are being carried out in accordance with the schedule and without any changes for Air Serbia passengers”, the Serbian flag carrier said.
Air Serbia and airBaltic signed a two-year wet-lease agreement in October 2025, which came into effect on November 1 of that year. The arrangement initially envisaged two A220-300s operating on behalf of Air Serbia during the 2025/26 winter season and up to four during the 2026 summer season. Based on its two-year duration, the current agreement is set to run until the end of October 2027, unless amended by the two airlines.
During September alone, the Latvian carrier’s aircraft are deployed on 516 Air Serbia flights, including both outbound and return services. The A220-300s are most frequently being used this month on services to Zurich, Amsterdam and Paris. airBaltic has also begun hiring locally based crew in Belgrade in recent months, who are assigned to flights operated on behalf of Air Serbia. Earlier this year, the carrier advertised thirty fixed-term cabin crew positions at its Belgrade base.
The assurances come after airBaltic voluntarily filed for Chapter 11 bankruptcy protection in the United States on September 14 as it seeks to restructure its finances. Chapter 11 enables a company to continue operating while reorganising its debt and other obligations and does not amount to a liquidation. airBaltic has said its flight operations will continue during the process. The Latvian flag carrier has been facing mounting financial pressure, including a sizeable debt burden. The restructuring will involve changes to airBaltic’s fleet and cost base. The airline plans to reduce the size of its Airbus A220-300 fleet from 55 to 36 aircraft by the end of 2026, while discussions have also been launched with unions over potential workforce reductions. airBaltic CEO Erno Hilden has stressed that operations will not be disrupted during the restructuring and has indicated that the carrier’s wet-lease business will form an important part of the process. Air Serbia has previously described the aircraft as an important reference point for future decisions concerning the composition of its own fleet.
ACMI business model is the safest for them
ReplyDeleteProbably the only thing that makes money for them at the moment.
Delete^ not necessarily. The reason they are in this situation now is because of the amount of these aircraft that they have. They must be paying significant money to pay them off.
DeleteWho is responsible for making a decision to buy so many A220s?
DeleteThey are giving aircraft for ACMI for peanuts literally. Because they don't know what to do with so many aircraft.
Delete@ 9.33
DeleteMartin Gauss former CEO
he championed the A220 as the airline’s sole aircraft type and publicly set out the plan to grow to 100 aircraft by 2030 when airBaltic ordered another 30 in 2023
DeleteAnd he now runs Gulf Air
DeleteMany credit him for getting air Baltic out of a financial mess when he took over.
DeleteHe was great during the first bailout of AirBaltic, but last few years have been really bad for the company.
DeleteI hope Air Serbia has contingency plans nonetheless. The agreement runs until October 2027, and a lot can change during a restructuring.
ReplyDelete+1
DeleteI would expect Air Serbia to have alternatives ready. A restructuring can take unexpected turns.
DeleteWet-lease, OU will have some available soon.
DeleteWhat happens if they hypothetically go into liquidation? What happens with the aircraft?
ReplyDeleteIf leased, they go back to the owners. If bought, they are sold to cover the debts.
DeleteWhoever takes the aircrafts through the bancruptcy procedure, has to employ them somehow, so nothing would change in the beginning, they would continue to fly and make money for the new owner.
DeleteNot necessarily? The new owner could simply use them for other purposes, namely scheduled flights or dry leases
DeleteThey need to change whole fleet to survive, not only 19 planes
ReplyDeleteChange the fleet to what?
DeleteTo the correct type of planes. A220 is a completely wrong for European market
DeleteAn important warning for another airline that has followed airBaltic's example of same-type fleet.
ReplyDeleteNot protecting the fleet strategy of OU, but airBaltic case is different. They were aiming for 100 aircrafts which is crazy for such small market they serve. Hence they started wet leasing.
DeleteI don't think they were counting on Russian market being closed to them.
DeleteExactly.....their plan of being a bridge between Russia and Ukraine with North Western Europe was good.
DeleteThings didn't turn as planned, the war still going, has drained their finances.
The ACMI was an intermediate solution to have some income but it's insufficient.
Does Air Serbia keep all 4 A220s this winter or will they again have 2?
ReplyDeleteGood question
DeleteIt should be two.
DeleteIf the restructuring changes airBaltic’s costs, could that eventually affect what Air Serbia pays for the aircraft?
DeleteI doubt any changes can be made to the 2 year contract, especially in terms of price.
DeleteAre the Belgrade-based cabin crew working exclusively on Air Serbia flights, or can airBaltic assign them elsewhere in its network?
ReplyDeleteI believe they are exclusively on Air Serbia flights.
DeleteIf no EU passeport/working visas they are assigned on JU only flights as part of the ACMI contract.
DeleteThat's also why only fixed term contracts are given.
Wondering if DCV banay hit them also, besides W6?
Delete*ban may
DeleteThey don't operate flights from Belgrade. They operate on behalf of Air Serbia. As you are very much aware.
DeleteSure they do, but they still don't have Serbian AOC and they based planes at BEG
DeleteThey haven't based them. They are not operating the flights for themselves. Actually read the changes to the rules before writing nonsense
DeleteI flew two times with them on Air Serbia flights from Zurich to BEG and from BEG to Madrid in the last 20 days, and I have not noticed a single serbian national among cabine crew.
DeleteAnd I flew with them Belgrade-Istanbul in July and the there was a male Serbian crew member. He also made the announcements in Serbia.
Delete@12.41 if you read the text, you will notice they hired 30 Serbian crew members and are operating 500+ flights this September for Air Serbia. So the likelihood your flight will have a Serbian crew member is not huge.
DeleteWhy did a Latvian airline seek bankruptcy protection in the United States? Is it related to how its aircraft or debt agreements are structured?
ReplyDeleteYes, aircraft leases and debt are part of the reason
DeleteUnder U.S. bankruptcy code, a foreign company can file for Chapter 11 if it has significant financial relationships or property in the U.S.. One of airBaltic’s largest unsecured creditors is the American aerospace company Pratt & Whitney (owned by RTX), to which it owes over $60 million for aircraft engines
Deletewow
Deletereducing the fleet from 55 to 36 aircraft is a major change.
ReplyDeleteBut nothing will change, neither its own operations nor ACMI business, they say. So it's officially magic, 19 aircraft (I'll leave you to calculate the no. of respective crew) will disappear in couple of months and all operations will continue as is.
DeleteThey will probably cut routes.
DeleteBT CEO only forgot to beg the customers to keep on purchasing tickets :)
DeleteWhich parts of its network will bear the cuts?
Deleteanon@10:12: most of ops out of RIX will be kept, but BT cut its network from VNO and TLL.
DeleteThey will get back 16 ACMI aircraft from Lufthansa and 2 from Air Serbia in October, seems that these 18 are to be returned to lessor.
Delete@10.36 I'm not so surprised. Didn't Estonia and Lithuania refuse to bail them out? Only Latvia provided the loan.
DeleteThe Air Serbia contract could be more valuable to it now than before.
ReplyDeletereassuring to hear from both airlines
ReplyDeleteHow much of airBaltic’s financial pressure comes from the aircraft themselves? An all-A220 fleet must be expensive to maintain when some planes are unavailable.
ReplyDeleteRemember when Air Baltic was interested in purchasing Jat?
ReplyDeleteYes.
DeleteI completely forgot it.
How things change.
If a company has filed for bankruptcy protection, one thing is certain: nothing is certain. These PR statements only add to the uncertainty. Just look at Air Serbia’s statement claiming that passenger safety was not compromised in that Marathon incident
ReplyDeleteWell JU didn't say that and it seems you wrote the whole comment just to write that sentence.
DeleteThis airline has always been in financial strife.
ReplyDeleteWhich other airlines does air baltic wet lease to?
ReplyDeleteI think swiss used them a bit too?
DeleteApart from Air Serbia, they are currently wet leasing to Swiss, Austrian Airlines, Lufthansa and Brussels Airlines.
DeleteSo Air Serbia and Lufthansa group.
DeleteSo there will be a lot of A220s on the market.
ReplyDeleteYes, but no one sane in Europe will take them
DeleteProbably they will get ride of the worst MSN they have.
DeleteI hope the restructuring succeeds. airBaltic has built an impressive airline
ReplyDeleteIt will not: they were approved another loan of eur 350 million (withdrew 170 sofar) with an interest rate of 12%. They need to repay it in 9 months.
DeleteThis will never happen.
So they will be bankrupt by mid next year?
DeleteUnless there is an opening of Russian and Ukrainian, BT situation is gloomy.
DeleteA wet-lease contract that keeps aircraft flying and brings in revenue may be one of the last things airBaltic wants to give up.
ReplyDeleteOnly the accountant in BT knows.
DeleteThe question is whether “no impact” means no impact for the entire two-year agreement or simply no changes for the moment.
ReplyDeleteFlying on the a220 remains a great experience. Leagues ahead of other aircraft operating at the moment from a passenger perspective.
ReplyDelete+1
DeleteYes I agree. And the airBaltic ones have Starlink. A nice experience
DeleteAs well as small screens with moving map
DeleteAnd nice interiors and windows
DeleteBS. Plane like any other
DeleteYes, until they replace you in order plane to keep stability. Or remove 10% of passengers due to high temperature outside. After that you realise that you are in a tin box, barely airworthy. Not to mention further flaws.
Delete@19:08 yeah mate
DeleteStarlink is amazing on their planes. I watched Serbia-Belgium volleyball match from start to finish on my iPhone, and the streaming was continuous without a single break for the whole match.
DeleteGood news
ReplyDeleteIt would be sad to see airBaltic disappear.
ReplyDeleteHope it does not come to that
DeleteThey only have themselves to blame
DeletePartially with the massive A220 order but they could not forsee the war in Ukraine which really hurt them. Ukraine and Russia were huge markets for them.
DeleteDoes BT wet lease to any other airlines?
ReplyDeleteAustrian, Lufthansa, Swiss and Brussels Airlines.
Delete👍
DeleteI notice they also do maintenance work for other A220 operators.
DeleteMaybe if they didn't have such megalomaniacal plans they could have survived with out filing for bankruptcy.
ReplyDeleteDo they W flight it to get planes back to Riga? Or do they just use a service flight to/from BEG to Riga?
ReplyDeleteDo they W flight it to get planes back to Riga? Or do they just use a service flight to/from BEG to Riga?
ReplyDeleteThey usually swap them around in Zurich after some time as far as I'm aware.
DeleteThanks
DeleteWinter is coming and it won't be a good one for air Baltic. I wish them good luck though.
ReplyDeleteBT has been more like a pyramid. Lets get government money, promise bright future, grow, run out of money, ask government again. When Gauss became CEO in 2011, Latvia gave BT over 100m EUR to get out of trouble. By the end of 2015, AirBaltic was again in debt to suppliers, and Latvia gave them another 80m EUR in cash while 23m worth of RIX airport fees were forgiven. During Covid BT received 340m in total when Gauss promised how soon there will be rich investors and Latvia will get everything back.
ReplyDeleteRegarding the Eastern transfer business, I believe the management decided to earn fast money and ignore any risks. In 2015 Ukraine banned Russian airlines and I assume that RIX became one of the strongest transit hubs between SVO/ LED and KBP.
DeleteI tend to think that partly AirBaltic also benefitted from Covid mess. Strong LCC players like FR, W6 and U2 reduced or left from the Baltic countries which allowed to be the first mover and grab the market share. About the ACMI model profitability, Latvian PM posted on X some weeks ago that ACMI deals were not lucrative at all and here I believe that is the reason why LH Group contracts appear to end now.
DeleteIt's funny how they are all funding allowed, but some experts claim that EU will prohibit sooner or later imaginary government funding for JU.
DeleteHate me for saying this but the Baltic states have become a laundromat for Russian linked money. Avion Express, SmartLynx, GetJet and Air Baltic are all part of the same circus. As as BT remain cheap and Lufthansa Group keeps supporting the model, they will find work. What nobody wants to discuss is the cost of early termination of those lease contracts. The exit will be anything but cheap. Add airBaltic’s A220 technical reliability problems, and the risks become hard to ignore.
ReplyDelete