Talks with an unnamed strategic investor for airBaltic (BT, Riga) have not gone "as smoothly as hoped," Chairman of the Supervisory Board Klavs Vasks said in a lengthy post on LinkedIn, and the airline might need more state funding ahead of its stock market debut planned for later in 2025.

"In order to meet its obligations and achieve its strategic goals, airBaltic cannot continue to operate with negative equity that has been accumulated for years. Although an additional capital injection from the state may cause a new local PR crisis, the need for [new funding] is most likely inevitable unless the state is ready to completely abandon its investment in favour of other investors," he underlined.

With the talks dithering, the majority-state-owned airline might need more funding to sustain its operations until it can go public.

Vasks highlighted that the rates on the current bonds issued by airBaltic are not sustainable in the long term. In May 2024, the airline raised EUR340 million euros (USD364.7 million at the time) through 14.5% bonds, which were more than two times oversubscribed. The airline subsequently increased the offering by another EUR40 million at the same rate in October 2021.

An airline spokesperson told ch-aviation that Vasks' post was his personal opinion and not an official statement, adding: "It does not indicate that the company needs additional funds from the state. Instead, the article outlines a common perspective for future cooperation. Negotiations with the pre-IPO strategic investor in airBaltic are ongoing and at an advanced stage."

Negotiations with the pre-IPO strategic investor in airBaltic are ongoing and at an advanced stage.

While the airlines never confirmed this, Lufthansa Group is reportedly the potential strategic investor behind the bid for a minority stake in the Latvian carrier. Earlier reports suggested the talks could conclude with an investment agreement by the end of 2024.

"Attracting such [a strategic] investor is not only a significant financial support for the company's capital, it also serves as a critical confirmation of the company's operations and future growth opportunities," Vasks said.

He stressed that the investment should be made within the broader IPO process and a listing would bring additional capital and ensure the sustainable development of airBaltic. The carrier said in November 2024 that its IPO would happen in the first half of 2025 at the earliest.

"The potential IPO is also in progress with the earliest possible listing in 2025 and when the market conditions are right," the airBaltic spokesperson explained.

airBaltic is currently 97.97%-owned by the Latvian government.