In response to a sharp rise in jet fuel prices, the Latvian airline AirBaltic has filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code in New York. The airline made the announcement on Monday as part of a broader restructuring effort to reduce its debt, which has been increasingly strained by the ongoing conflict between the United States and Iran. This conflict has disrupted global oil markets, driving up fuel costs and putting pressure on airlines worldwide. Jet fuel prices have nearly doubled since the conflict began, marking the worst crisis in the aviation industry since the height of the COVID-19 pandemic. Investors and airline executives have long warned that carriers with high debt and limited financial flexibility would be hit hardest by such volatility. AirBaltic, which is majority-owned by the Latvian government, said the bankruptcy filing is intended to shield the company from its creditors while it works on restructuring its debt. The airline emphasized that flights will continue as scheduled during the restructuring process, which is being managed under judicial supervision. This is the second airline to be affected by the current crisis, following the bankruptcy of U.S. low-cost carrier Spirit Airlines in May. Spirit had sought government support but failed to secure the necessary funding from its creditors. AirBaltic's financial situation has deteriorated further in recent months due to rising fuel costs and a 30 million euro loan from the Latvian state in April. The airline is now relying on a 350 million euro (405 million dollar) funding commitment from several major lenders, including Strategic Value Partners, Barclays, Hayfin Capital Management, Morgan Stanley, and Oaktree Capital Management, to keep operations running during the restructuring. Other airlines are also grappling with the financial strain caused by higher fuel prices and currency fluctuations. For example, AirAsia, the largest low-cost airline in Southeast Asia, is actively seeking new capital to strengthen its financial position. As the conflict continues to impact global energy markets, more airlines may face similar challenges, prompting a broader reassessment of financial strategies and cost management across the industry.