Aer Lingus Regional operator hints at further airline consolidation
The operator of the Aer Lingus Regional route network has said it intends to play a leading part in further consolidation among Europe's smaller airlines despite losses mounting in its latest financial year.
Stobart Group has also said it sees the Aer Lingus Regional network as continuing to play a key part in its operations. Stobart Air has operated Aer Lingus Regional on a franchise basis since 2010 and its current contract is due for renewal in 2022.
"Stobart Air will continue to provide high-quality franchise operations to Aer Lingus and other key partners," the group said.
Stobart's involvement in any further consolidation would be as part of the wider Connect Airways consortium.
Stobart Group reported a more than doubling in losses for its latest financial year to £58.2m (€66m). After-tax losses from continuing operations surged by nearly 200% to £42.6m. However, group revenues grew nearly 40% to just under £147m.
Last year's losses were driven by more than £10m in aviation costs, a £16.3m write-down from continuing operations and £11m in impairment charges relating to infrastructure assets and loan notes.
Stobart's aviation division owns London Southend Airport and saw a 33% increase in passenger numbers to 1.5 million people last year. That was mainly driven by an increase in EasyJet passengers and is likely to be further aided, this year, by Ryanair flying to and from the airport.
Ryanair commenced flying from Southend last month and expects to carry more than one million passengers through the airport every year.
The Stobart Aviation division is now focused solely on airports and aviation services.
Stobart Air is now part of Connect Airways - the consortium that successfully bid for UK low fares carrier Flybe earlier this year. Stobart Group owns 30% of Connect alongside consortium partners Virgin Atlantic and Cyrus Capital.
"The creation of Connect Airways is the first step towards further regional airline consolidation. The transaction will also see Flybe change its name over time under the Virgin brand and benefit from a more integrated commercial co-operation with Virgin Atlantic's long-haul operations from London and Manchester," Stobart said.
