A U.S. judge has accepted Latvian airline airBaltic’s request to enter Chapter 11 bankruptcy proceedings, clearing the way for the government-controlled carrier to begin restructuring its debt, according to Reuters.

Latvian Prime Minister Andris Kulbergs said the court decision means airBaltic can immediately access financing, begin restructuring and review its obligations to creditors.

The airline filed voluntarily for Chapter 11 protection Monday after the Iran war increased financial pressure on its operations.

AirBaltic has secured a commitment for approximately €350 million, or about $404 million, in financing from certain lenders, although that financing remains subject to court approval.

The airline is expected to spend the coming months negotiating with bondholders, aircraft lessors and other creditors. It is aiming to complete the restructuring around June 2027 with a smaller fleet and lower operating costs.

(YWN World Headquarters – NYC)