Prime Minister Evika Siliņa (New Unity) has published on social media an assessment of the Ministry of Economics (EM) on the impact of airBaltic on the economy, signed by the Minister of Economy Viktors Valaņš (Greens and Farmers’ Union/ZZS), which concludes that the cessation of airBaltic’s operations would have a long-term negative impact on the Latvian economy.
Among other things, the assessment emphasizes that Latvia’s international tourism sector would be deeply impacted by the disappearance of the national flag carrier and “would create a significant short- and medium-term economic shock.”
Visitor numbers are directly linked to air connectivity, especially for city leisure trips, the conference segment and higher-spending short-term visitors. airBaltic also helps Rīga act as a regional transport hub – for example, passengers from Helsinki to Barcelona often fly via Rīga, says the report, earning airport charges, income from aeronautical services, as well as transfer passenger spending – and even putting Latvia on the radar of travellers for future visits.
The 2026 forecast of the Investment and Development Agency of Latvia predicts that foreign tourism in Latvia will contribute approximately 1.4 to 1.5 billion to the gross domestic product (GDP) in 2026, of which airBaltic’s contribution is approximately 300 million euros.
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In the liquidation scenario, approximately 30-40% of airBaltic’s tourism revenue would not be replaced, which would mean a reduction in GDP of 90 to 120 million euros, not taking into account the indirect impact – increased air ticket prices, lost trust from foreign guests, reduced future bookings and a negative impact on investor sentiment, the report emphasizes.
Around half of Latvia’s international travellers arrive by air, and more than half of them (57%) arrive on airBaltic planes.
The report also highlights that the loss of airBaltic would result in a measurable, permanent and significant reduction in foreign direct investment and would hamper business development, particularly in high value-added sectors that are critical for long-term growth. Pitches to potential investors routinely boast about Rīga being exceptionally well connected by air – the disappearance of the national airline would place a big question mark over such claims.
At the same time, the authors of the report expect that in the event of the liquidation of airBaltic, the flow of goods, investments and trade would decrease, as aviation stimulates global trade and investments, allows for improved labour and capital productivity, and promotes innovation and knowledge exchange.
“Aviation plays a crucial role, for example, in promoting the development of dynamic and efficient supply chains and in fostering the growth of e-commerce,” the letter emphasizes.
There is also the fact that airBaltic currently employs more than 2,500 people directly, and affects up to 25,000 jobs in the wider economy.
In a concluding summary, the report suggests the collapse of airBaltic could have a negative impact on Latvian GDP of up to 1.1% of GDP in the medium term, or up to 450 million euros as a “conservative estimate”.
The airline has asked the state to grant it a 30 million euro loan to mitigate the negative impact of the ongoing conflict in the Middle East on the company’s financial situation. The Saeima’s responsible committee has not yet decided on the loan to the airline due to objections from the ZZS political party – one of the three parties in the ruling coalition. ZZS explained that it needs to receive additional information in order to decide on lending money from the state budget to airBaltic – despite the fact it was their minister, Valainis, who signed off the report on the economic consequences of an airBaltic collapse. Without ZZS’ votes in parliament, it is highly unlikely the loan could be approved.
But there is more to this than just the aviation industry or economics. Saeima elections are looming in the Autumn and parties are jostling for position both within and without the coalition. In particular, they are seeking to distance themselves from controversial subjects among voters, such as the large amounts of money already ploughed into airBaltic and the delays and funding shortfalls of the Rail Baltica project.
In 2025, airBaltic operated with losses of EUR 44.3 million, with revenues of EUR 779.3 million.
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