News / Avia Solutions Group hits out at financial health 'smear campaign'

Question marks over Latvian carrier SmartLynx Airlines’ bankruptcy are raising concerns about former owner Avia Solutions Group’s (ASG) financial health, with a source questioning its strategy and the potential impact on the wider airfreight scene.

SmartLynx announced, a month after a management buyout supported by Stichting Break Point Distressed Assets Management (SBP) in October, it had ceased operations, sparking an outcry from Air Justice, set up tb Blacklist.Aero CEO Artem Degtiarov to represent its creditors.

Pointing to SBP’s registration a month prior to the sale, Mr Degtiarov alleges that ASG was “directly involved” in its creation and was aware of the carrier’s financial state at the point of sale and was pushing for it to cover the debts.

“There are numerous public comments by the CEO of SmartLynx Airlines in which he acknowledges that the company had been experiencing serious financial difficulties since 2024,” Mr Degtiarov told The Loadstar.

With SmartLynx having built up debts reportedly exceeding €238m, its new owners filed for creditor protection in Riga just six days after the sale’s announcement, leading Mr Degtiarov to point out that if ASG was aware, the sale would be in breach of EU and Latvian law.

Nor is he alone, with one source who works closely with ASG chair Gediminas Žiemelis singling him out as responsible for the present concern surrounding the company and expressing fears over its future.

The source told The Loadstar: “When things like this happen, normally heads will roll; but heads won’t roll at ASG – there is only one person who makes the decisions, and he thinks he’s always right.

“He [Mr Žiemelis] is the only person with any say. He’s incredibly arrogant, it’s shocking quite honestly. I’m absolutely worried about poor decisions that could affect the group. I don’t know how badly it is falling apart, but when you’re that arrogant, the fall’s harder.”

The Loadstar understands ASG sees Mr Degtiarov’s claims as a smear campaign, with his publication, Blacklist.Aero, alleging that another ASG company, Slovakian cargo and passenger charter line Air Explore, was “going to the wall”.

Citing a source within the company, Blacklist.Aero has claimed Air Explore “will soon cease to exist as an independent company” and would merge with another ASG firm, KlasJet, rather than be sold in an effort to avoid an ASG share price fall.

“The public disclosure of SmartLynx’s debts and publication of the full list of creditors on the Blacklist.Aero website had devastating consequences for Avia Solutions Group bonds, which were issued in 2023 in the amount of $300m,” Blacklist.Aero wrote.

“Immediately after that news, ASG bonds fell from 95 cents to 85 cents. At one point they even dropped to 77 cents, below the psychological threshold of 80 cents, under which investors begin to treat bonds as effectively in default.”

Responding to developments surrounding SmartLynx and the Blacklist.Aero rumours circulating about Air Explore, an ASG spokesperson told The Loadstar: “To be absolutely clear: AirExplore is not disappearing.

“It is also important to address the broader narrative currently circulated by Air Justice (ie, blacklist.aero), the most recent public claims are, in our view, nothing more than a continuation of a baseless smear campaign.

“Suggestions that ASG is struggling financially are incorrect. ASG continues to operate normally across its businesses, including Chapman Freeborn and Magma Aviation, and remains active in evaluating growth opportunities globally, including cargo.”

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