Air Baltic Corp has outlined a turnaround plan involving cost cuts and a debt-for-equity swap. The Latvian airline will operate 40 aircraft by 2031, down from 100 under a previous plan, according to a statement Tuesday. A portion of its €380 million ($439 million) high-yield note will be converted into equity, with bondholders receiving €125 million of debt.

The move aims to stabilize the ailing business. The fleet reduction and debt restructuring are key steps in Air Baltic's recovery strategy. The airline, based at Riga International Airport, is focusing on profitability rather than expansion.

Bondholders will retain some debt while converting a significant portion into equity, aligning interests with the company's long-term health.