On the morning of 24 November 2025, a SmartLynx employee reached her colleagues by text. Management had summoned staff to the canteen at the Riga headquarters. Rumors of financial trouble had been circulating internally for months, but nobody seemed to know what was actually going to be announced.

"Guys, what's happening?" she wrote.

The answer came back fast: "Well, the airline is bankrupt but the CEO's inviting us to a party."

By that evening, SmartLynx Airlines – one of Europe's largest ACMI and wet-lease operators – had ceased operations entirely. The company had entered legal protection proceedings in late October; its Latvian air operator certificate was now suspended. Its Estonian and Maltese certificates would follow.

The meeting

An invitation for a meeting with management arrived on 21 Nov 2025, Friday evening – casual, brief, almost accidental. The meeting was Monday at 10am. When they arrived, police were present; in Latvia, large public gatherings require registration and automatically trigger police attendance. Several employees read the presence differently. "The CEO probably was worried about his safety," one said, "that someone was going to be very mad."

Workers still describe what followed with disbelief. On 24 November, staff gathered at SmartLynx's Riga headquarters to hear from management. According to several former employees, executives described efforts that had been made to save the airline and assured workers they would be "taken care of." Staff were then presented with termination agreements and encouraged to sign quickly. What those agreements actually said was different from how they were presented: the document was framed not as a redundancy notice but as a voluntary resignation – stating the signatory had no complaints, sought no compensation and was leaving of their own accord. The HR representative told workers verbally that signing would ensure swift payment. The document itself stated that compensation was not guaranteed.

"There was a lot of fake urgency," one former employee said. "Nobody will be here next week, so sign it this week."

Another described the choice as binary: sign immediately, or wait for the formal insolvency process to run its course.

Many refused. Others signed because they feared losing access to unemployment benefits – in Latvia, workers who did not sign faced a delay of weeks before their first unemployment payment could arrive, leaving those without savings in a particularly difficult position. Former employees estimate that around 100 workers ultimately declined to sign, though no official figure has been confirmed.

After the flights stopped

For many workers, the collapse was only the beginning.

They created WhatsApp groups to exchange legal advice, insolvency updates and information about unpaid wages. Some contacted labor authorities. Several of those interviewed for this article say they no longer expect to recover most of what they are owed.

Agency-contracted crew, according to multiple accounts, received neither their October nor November salaries. Workers directly employed by SmartLynx Latvia were eventually able to claim partial compensation through Latvia's employee guarantee mechanisms, though several say the payments covered only a fraction of what was owed.

Some workers chose not to sign the termination agreements specifically because they believed doing so could reduce their ability to recover money through insolvency proceedings.

Since the collapse, the insolvency administrator has notified former workers that a criminal investigation may be opened against the former board members, on suspicion of hindering the insolvency process. The board members have pushed back, questioning the administrator's conduct.

The company had entered legal protection proceedings in late October 2025 following what it described as financial difficulties and high debt levels. In parallel, ownership changed hands for €1 million: 90% of shares were sold to the Dutch entity Stichting Break Point Distressed Assets Management, while the CEO and CFO each acquired 5% apiece for €50,000 each.

At the center of the insolvency proceedings is a debt structure that helps explain why many workers believe the collapse was not accidental. Court filings show that SmartLynx owed EUR 238.4 million to 781 creditors at the time of its insolvency. Of that total, EUR 171 million – nearly 72% – was owed not to external suppliers or employees, but to finance, airline and holding subsidiaries within Avia Solutions Group itself. Major external creditors included maintenance and leasing providers such as Lufthansa Technik.

For former workers, the numbers fuel even more suspicion: the Latvian entity had been loaded with intercompany debt before being sold and shut down. "That's a clear example of a scheme of how you're going to bankrupt a company with all the debts it has," one former employee said.

Adding to the suspicion, some directly employed staff say they had been told in the lead-up to the collapse that they would transition to the Maltese entity within the group and continue under new contracts – a promise that was never fulfilled. "We would just basically create a new contract with us, like from this Maltese company," one former employee recalled being told. "And that everything would continue as per normal operations."

Avia Solutions Group chairman Gediminas Žiemelis, speaking to industry publication ch-aviation in an interview in Dubai, attributed the collapse to an operational failure: the inability of the Airbus A321-200 freighter conversion to replace the Boeing 757 in SmartLynx's cargo operations. ASG has otherwise denied responsibility for SmartLynx obligations following the October 2025 ownership transfer. In fact, following SmartLynx's collapse, ASG says it repurchased 11 former SmartLynx aircraft. Žiemelis maintained that the bankruptcy did not materially damage ASG's financial position despite a credit-rating downgrade by S&P in December 2025. Media report that criminal investigations are being conducted against management on suspicion of repeated fraud, alongside a Latvian Ministry of Transport compliance assessment. No court has established wrongdoing yet.

 

The system behind the collapse

The SmartLynx story is not only about one airline failure. It is also about how modern European aviation increasingly operates through layers of subcontractors, agencies and cross-border corporate structures that can make accountability difficult when things go wrong – and how little protection exists for workers when an operator fails.

SmartLynx operated under multiple air operator certificates across different countries. Crew were employed through agencies registered elsewhere. Aircraft, contracts and liabilities were distributed across jurisdictions. When SmartLynx collapsed, workers found out what a decade of warnings had meant.

The WhatsApp groups are quieter now. Some workers are still waiting for insolvency updates. Most have moved on – new jobs, new airlines, new contracts not so different from the ones that left them exposed. The party is over. The bills remain unpaid.