AirBaltic is the airline with the largest market share in Tallinn, used by nearly one‑third of all passengers. The company serves almost 30 routes from Tallinn Airport.

The airline's difficulties have reached the point where Tallinn routes are threatened with closure.

The company's loss exceeded 44 million euros last year. This year Latvia gave airBaltic a short‑term loan of 30 million euros, with a repayment deadline of 31 August. The closer the deadline approaches, the bigger the question mark over whether the struggling airline can repay the loan.

If the airline does not repay the money received from the state on time, the European Commission will treat it as state aid and will very likely initiate proceedings.

Latvian Finance Minister Māris Kučinskis admitted publicly in early July that airBaltic will likely have to reduce operations due to financial difficulties.

Lithuania announced that it is already preparing a backup plan in case airBaltic reduces its operations or leaves the country due to financial problems.

Latvian Prime Minister Andris Kulbergs said last week that the government is negotiating with a major investor to save the airline. The prime minister admitted that the purpose of involving an investor is to avoid the risk of insolvency.

Riigikogu member and aviation expert Toomas Uibo (Eesti 200) commented on Friday that finding a major investor would bring Tallinn Airport the same result as the airline's bankruptcy — the investor is likely not interested in the airline flying from Tallinn.

"If a major investor were to come into airBaltic now, they would naturally review all routes and the entire strategy the company has developed over recent decades. These reorganizations could be very large. AirBaltic's primary task or interest is naturally to maintain Riga as its main base on which the route network is built," Uibo said.

Uibo noted that in addition to tourism routes, the airline also serves business routes, and their interruption would be felt in Estonia's economy.

Tallinn Airport is not preparing separate plans

Tallinn Airport board member Eero Pärgmäe said the airport has 15 regular carriers, which ensures that if something happens to one of them, people can continue flying because other carriers will fill the gap.

He noted that Tallinn Airport has several hub airports, and airBaltic also flies several routes in parallel with another airline, meaning the market cannot end up in a situation where people lose flight options.

"Tallinn Airport is a company, and every company must assess its risks. Naturally, we have assessed the risks related to airBaltic. We have made the necessary calculations and plans. But at the moment we do not see a major reason for panic. AirBaltic continues to operate on all routes, and we are in constant contact with them. And we very much hope that their restructuring plan proceeds successfully," Pärgmäe said.

Pärgmäe noted that Tallinn Airport already has a route‑support program that includes discounts for new routes, and if needed, the airport can make it even more attractive. "When an airline opens a new route, it pays a lower price for certain years," he explained.

AirBaltic's departure would affect smaller routes

Aviation expert Erki Urva said airBaltic's departure would be a major blow for Estonia, but at the same time a relief for Latvian taxpayers, who have so far subsidized flights from Estonia.

"They have paid for all this subsidy in millions or almost billions of euros with which the Latvian state has supported airBaltic's operations here, in Lithuania and elsewhere," he said.

Other airlines likely could not take over all routes.

"I suspect that marginal routes will disappear. Competitors are more interested in carrying passengers through their hub airports — for example, Finnair through Helsinki, Lufthansa through Frankfurt, and LOT certainly through Warsaw. They will simply add capacity there, but I do not believe that direct flights will return in large numbers," he said.

"To some destinations, flights will certainly continue with low‑cost carriers, such as Wizz Air, Ryanair or someone else," Urva noted.

While Lithuania is already preparing a backup plan, Urva said Estonia does not appear to have political readiness to invest in aviation again.

"There has been talk that tens of millions have been burned through Estonian Air and Nordica. I do not agree with that claim and am completely convinced that Estonian aviation companies have brought more money into the Estonian state than has gone out, through export revenues, tax revenues and similar. But at present I do not see anyone in Estonia seriously considering creating a third state‑owned airline," he said.

Estonian state has no direct backup plan

Lithuania is preparing a backup plan in case airBaltic significantly reduces flights from Vilnius or shuts down entirely.

"We are in a very, very similar situation to Lithuania, and our backup plan has actually been underway for quite some time, because airBaltic's market share in Estonia has decreased. Tallinn Airport has done a very good job replacing and finding new carriers and routes. From the airport's perspective, everything is proceeding normally," said Infrastructure Minister Kuldar Leis (Reform Party).

The government does not plan to stop requesting dividends from Tallinn Airport, which would allow the airport more resources to support routes.

"Dividends can be discussed when the time comes. Today Tallinn Airport has managed so well that the number of routes is increasing and they can also pay dividends. The priority is increasing air traffic, and dividends come second, so things are proceeding in the right order. There is no need to give up dividends now," Leis said.

Estonia is awaiting Air Baltic's new business plan

"From Estonia's side, we very much hope that airBaltic continues its operations and that its main owner — the Latvian state — continues to lead and support the airline so that it can continue operating. As we hear, they are preparing yet another new business plan on how to shrink sustainably. We would also like to see what airBaltic's future looks like according to the new business plan," Leis said.

Although "shrinking sustainably" would clearly mean reducing routes in Estonia as well, the infrastructure minister expressed hope that the company will nevertheless survive.

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