What's Happening?
Lufthansa Group has finalized its investment in Air Baltic, with the Latvian government co-investing on the same terms, totaling €28 million ($32.8 million). The investment is part of Air Baltic's preparation for an initial public offering (IPO) aimed at attracting €250-300 million to support fleet expansion to 100 aircraft by 2029. The carrier currently operates 50 Airbus A220s and plans to increase its fleet to 57 aircraft by mid-2026 through lease agreements. The IPO, scheduled for the second quarter of 2026, is crucial for minimizing fleet delivery delays and achieving expansion goals.
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Why It's Important?
The investment by Lufthansa and the Latvian government is a strategic move to bolster Air Baltic's financial position ahead of its IPO. The funds will support the carrier's ambitious expansion plans, enabling it to increase its fleet size and enhance operational capabilities. The IPO is expected to provide the necessary capital for Air Baltic to navigate uncertainties related to fleet deliveries and secure its position in the competitive aviation market. The appointment of a permanent CEO, Erno Hilden, is a key milestone in preparing for public market readiness.
What's Next?
Air Baltic is focused on preparing for its IPO in the second quarter of 2026, which will be pivotal in securing funding for fleet expansion and minimizing delivery delays. The carrier is in discussions with Airbus to explore solutions for fleet delivery challenges. The appointment of Erno Hilden as CEO in December will play a crucial role in steering the company towards public market readiness and achieving its expansion goals.
