ENThe aim of the paper is to analyze the level of competitiveness of Air Baltic in the Baltic States. Air Baltic is the largest airline in the Baltic States, however, the company has been unstable financially due to financial crisis and its aftermath. Therefore, it is important to understand whether expanding to neighboring countries has been a good decision financially and whether Air Baltic is competitive enough to facilitate a sustainable growth in the future. Thus, the following hypothesis has been proposed: By ensuring high level of competitiveness in the Baltic States, Air Baltic has managed to financially stabilize its operational activities. The following research methods are used in the paper: monographic method, document analysis, data processing methods (SPSS), comparative method, statistical data analysis, survey. The results show that that expanding to Estonia and Lithuania has stabilized the financial state of Air Baltic, allowing the authors to conclude that Air Baltic is competitive in the Baltic States’ airline market, because it offers various routes, services and connecting flights for a moderate price, which allows passengers to get almost anywhere in the world. [From the publication]