airBaltic Reports Record Revenue and Q2 Profit, but Operational Challenges Persist
The Latvian airline improves its profitability and passenger traffic while grappling with the P&W engine crisis, rising costs, and a delayed IPO.
/https://aviacionlinecdn.eleco.com.ar/media/2021/04/airbaltic-aircraft-13.jpg)
Latvia's national airline, airBaltic, today presented its unaudited financial and operational results for the first half of 2025, revealing a landscape of contrasts. The company achieved record revenue of €349.6 million in the first half, up 3.0% from the previous year, and posted a net profit of €27.6 million in the second quarter.
However, these achievements are tempered by persistent operational challenges, mainly stemming from the Pratt & Whitney engine crisis affecting its Airbus A220-300 fleet, growing cost pressures, and the postponement of its anticipated Initial Public Offering (IPO) until 2026.
The second-quarter performance was crucial for the half-year results. Between April and June, airBaltic generated revenue of €216.9 million, a 4.8% year-over-year increase. This growth was driven by a 6.2% rise in passengers on its network, reaching 1.4 million, and an improved load factor, which stood at a solid 80.2%.
The net loss for the first half narrowed to €1.7 million, a substantial improvement from the €88.8 million loss recorded in the same period of 2024, partly benefiting from a favorable foreign exchange effect and the absence of accelerated depreciation charges that impacted last year's result.
Pauls Cālītis, interim CEO and Chief Operations Officer of airBaltic, stated that "the results of the first half of 2025 show the resilience of our operations and the consistent demand for our services, as well as the reliability we have ensured in our operations." He added that despite the challenges, the company "sustained stable performance and continued to grow," which, in his view, "confirms the strength of our business model."
The Engine Crisis and Cost Pressures
The main obstacle for airBaltic remains the shortage of Pratt & Whitney PW1500G engines. During the second quarter of 2025, the airline had an average of nine aircraft on the ground (AOG) due to a lack of spare engines and maintenance delays, three more than in the same period of 2024. This situation forced the company to resort to expensive wet-leasing (ACMI-in) from other operators to maintain its route network, which negatively impacted costs and the Net Promoter Score (NPS), as flights operated by third parties typically receive lower customer scores.
Compounding this is cost inflation in key areas. Expenses for air navigation and air traffic control fees (Eurocontrol) increased by over 30%, while personnel and maintenance costs also grew at a rate faster than the capacity increase. Additionally, costs for CO2 emission allowances rose by 52% in the second quarter, due to the reduction of free allowances by the European Union.
Is airBaltic profitable? airBaltic achieved a net profit of €27.6 million in Q2 2025 but reported a net loss of €1.7 million for the first half of the year. Its profitability is heavily affected by high operating costs and the ongoing engine crisis.
What are airBaltic's main problems? Its primary challenges are the shortage of Pratt & Whitney engines for its A220 fleet, which grounds aircraft; rising operating costs (fees, staff, CO2); high-interest debt (14.5%); and the need for fresh capital, which has been complicated by its delayed IPO.
When will airBaltic go public? The airline has postponed its plans for an Initial Public Offering (IPO) until 2026, citing the need for a new permanent CEO and more favorable market conditions.
Strategy and Future: A Bet on ACMI and Lufthansa's Investment
To counter the seasonality of its primary market in the Baltics and utilize its fleet more efficiently, airBaltic has strengthened its ACMI-out business, wet-leasing its aircraft and crews to other airlines. This segment already accounts for 20% of the company's total revenue and is expected to grow by 20% in 2025. The airline has a strategic agreement with Lufthansa Group, for whom it operated up to 19 aircraft in the second quarter. Furthermore, it is actively seeking counter-seasonal agreements, such as the one signed with Uruguay's SUA, to keep its fleet active during the European winter.
A key step for its financial future is the investment from Lufthansa Group, which will acquire a 10% stake for €14 million. The transaction, already approved by German competition authorities, is expected to close in August 2025. This capital injection is vital, especially after airBaltic issued €380 million in bonds in 2024 at a high interest rate of 14.5%. The IPO, now postponed to 2026, was the original plan to refinance this debt.
With the search for a permanent CEO in its final stages and plans to grow its fleet to 57 aircraft by mid-2026, airBaltic projects to carry more than 5.2 million passengers in 2025 and achieve an adjusted EBITDAR of between €160 million and €175 million.
Para comentar, debés estar registradoPor favor, iniciá sesión