The insolvency of Latvian ACMI airline Smartlynx Airlines raises numerous questions regarding the circumstances of the collapse and the complexity of the ownership structures.
Immediately before filing for creditor protection at the end of October, the airline, which specialized in wet leasing (ACMI – Aircraft, Crew, Maintenance, and Insurance), was taken over by its former parent company, the globally operating Avia Solutions Group (ASG), sold to a Dutch fund. This change of ownership occurred shortly before the failure of the self-administered restructuring attempt, which was originally scheduled to run until the end of February 2026. Operations at the Latvian unit have since been completely discontinued.
The case of Smartlynx Airlines Latvia is particularly noteworthy due to its immense debt burden. EUR 238 million and the fact that a large portion of these liabilities are owed to the former parent company, Avia Solutions Group itself. While the European sister companies in Malta and Estonia are also affected by the insolvency and are out of operation, Smartlynx's Asian and Australian units continue flight operations under new brand names.
The controversial change of ownership and the debt structure
The transaction, which accompanied the collapse of Smartlynx Airlines Latvia, caused a stir in the industry. Avia Solutions sold 90 percent of the shares in the Latvian company to... Stichting Break Point Distressed Assets Management, a Dutch fund. The remaining 10 percent went to the airline's management. According to research, the Dutch fund leads to a law firm in Cyprus that manages a number of companies and typically deals with acute corporate restructurings.
The close timing of the sale and the insolvency filing is raising questions among external creditors and industry observers. The Latvian airline's total liabilities amounted to over €238 million. Of this, approximately... EUR 175 million on demands from companies within the Avia Solutions Group, which accounts for almost three-quarters of the total debt. External creditors include major players in the aviation industry such as Lufthansa Technology and Lufthansa Systems with claims of approximately five million euros as well as Airbus approximately €750.000 was owed for spare parts deliveries. Unpaid tax debts in Latvia amounting to around €500.000 were also reported.
Avia Solutions Group emphasized that the transaction was transparent and were carried out in accordance with international governance standards and applicable laws. The problems of the European Smartlynx units exclusively affect those companies, which are no longer part of the group. Nevertheless, the circumstances of the short-term spin-off of the heavily indebted Latvian arm, while the majority of the debt remained with the parent company, have led to speculation about a deliberate isolation of the debt burden.
The fate of the European sister companies
The situation of the other European units of the former Smartlynx group, namely Smartlynx Airlines Estonia and Smartlynx Airlines MaltaThe circumstances were initially unclear. Company register extracts showed that both companies were under the control of Avia Solutions until the sale, albeit through complex ownership structures. Smartlynx Estonia was a subsidiary of the Irish company ASG Aero Invest Ireland DAC (an ASG subsidiary). Smartlynx Malta, in turn, was majority-owned by Air Holding Limited, in which Avia Solutions held a large shareholding.
Although the initial intention was to retain and reposition the Maltese and Estonian units, a spokesperson for Avia Solutions later confirmed that these two units had also been sold. The registration of the ownership transfer is underway. With the cessation of flight operations by all three European Smartlynx companies – Latvia, Estonia, and Malta – this marks the de facto end of the group. End of the Smartlynx brand in the European ACMI market.
This development underlines the tendency within the Avia Solutions Group to consolidate its European Air Operator Certificates (AOCs) and possibly focus on other brands within the group, such as Avion Express Malta or the newly founded BBN Airlines.
Renaming and continuation in Asia and Australia
Unlike the European units, the sister airlines in Asia and Australia, which still belong to the Avia Solutions Group, continue their operations, albeit under new names.
- Thai Smartlynx is in BBN Airlines Thailand Renamed. The new name joins the existing brands. BBN Airlines Indonesia and BBN Airlines Turkey This suggests a targeted establishment of a global ACMI brand under the umbrella of the Avia Solutions Group, which operates in a geographically diversified manner and is less associated with the insolvencies in Europe.
- Smartlynx AustraliaSmartlynx Australia, which was acquired by Avia Solutions in early 2024 under the name Skytrans and renamed in mid-2025, is also planning a name change but will continue to use its existing brand for the time being. Continuing operations in these regions ensures the Avia Solutions Group's continued presence in key growth markets.
Geographical diversification and the creation of new brand structures appear to be part of the group's strategic realignment, aimed at optimizing operational efficiency and mitigating risk in certain markets. Avia Solutions, headquartered in Dublin, is the world's largest provider of ACMI (Aircraft, Crew, Maintenance, and Insurance) services and has an extensive portfolio of companies in areas such as maintenance, pilot training, aircraft leasing, and cargo. The events surrounding the Smartlynx insolvency highlight the risks and complexities of the ACMI sector, as well as the challenges arising from the structure of multinational airline groups, particularly when subsidiaries fall into crisis. Resolving the debt issue and the legal proceedings surrounding the recent changes in ownership will be key focuses for creditors and regulators in the coming months.