Latvian airline airBaltic filed Chapter 11 proceedings on Monday, becoming the first European carrier during the Iran war to seek bankruptcy protection as surging jet-fuel prices strain the aviation industry. The conflict has created the sector’s sharpest cost crisis since the COVID-19 pandemic, with fuel prices doubling since late February and the blocked Strait of Hormuz keeping pressure on operating expenses. Smaller airlines face particular risks because they run on thin margins and typically consume their summer cash reserves during the weaker winter season. Wizz Air has deepened operating losses and cut fares to attract passengers, although it carried a record 8.7 million passengers in August and cites strong liquidity, hedging and an efficient fleet. AirAsia is seeking fresh capital after sustained losses and restructuring, while Air Transat has faced escalating fuel costs. Analysts expect difficult market conditions to transfer routes and airport slots toward larger airlines and accelerate consolidation involving groups such as IAG, Lufthansa and Air France-KLM. AirBaltic is seeking another strategic investor; Lufthansa owns 10% but does not plan to raise its stake. Analysts say Chapter 11 could give airBaltic time to reorganize and survive, unlike U.S. peer Spirit, which collapsed in May after seeking protection before the war.