Latvia’s airBaltic has voluntarily filed for Chapter 11 bankruptcy protection in the United States as it seeks to address mounting financial pressures amid a challenging aviation sector. The airline announced the filing on Monday in New York, aiming to restructure its substantial debt and secure its operational future amid the ongoing impact of the Iran war on the industry.

As part of its restructuring efforts, airBaltic has arranged a €350 million ($405 million) financing commitment from a consortium of lenders that includes Strategic Value Partners, Barclays, Hayfin Capital Management, Morgan Stanley, and Oaktree Capital Management. The funds are intended to support the airline’s operations during the bankruptcy process.

Court documents reveal that airBaltic plans to use the bankruptcy protection to cancel or defer outstanding deliveries tied to a $3.5 billion order for 40 Airbus aircraft, along with $106.7 million worth of additional engines from Pratt & Whitney. The airline has already engaged with Airbus to postpone further deliveries beyond the current year.

Pratt & Whitney’s parent company, RTX, declined to comment on the situation. The move by airBaltic reflects broader turmoil in the airline industry, which continues to face disruption from geopolitical tensions and related economic fallout.