Ireland’s Stobart Air ceases ops, enters liquidation

Stobart Air (RE, Dublin Int’l) has ceased trading as of Friday, June 11, 2021, after its sale to Ettyl Ltd. collapsed. The Irish production carrier had been flying Irish and UK routes for Aer Lingus Regional using a fleet of one ATR42-600 and twelve ATR72-600s (of which only eight were last active). “Late on the evening of June 11, Stobart Air notified Aer Lingus that it was terminating its Franchise Agreement with Aer Lingus with immediate effect,” the IAG International Airlines Group subsidiary said in a statement. “As a result, all Aer Lingus Regional flights operated by Stobart Air are cancelled. Stobart Air referred to the continuing impact of the pandemic, which has resulted in almost no flying since March 2020. Stobart Air has ceased trading and is now in the process of appointing a liquidator.” Stobart Air is owned by aviation and energy infrastructure group Esken, which had been trying to offload the airline as well as Carlisle Lake District Airport to Ettyl, an Isle of Man-based entity set up by cryptocurrency guru Jason Scales. On May 28, 2021, Ettyl advised Esken that its original funding package needed to complete the transaction was no longer available and that it was in discussions on alternative funding options. “It is now clear that Ettyl is unable to conclude the transactions on the original terms or to obtain an alternative funding package within the required timescale,” Esken said in a statement. “Esken has therefore exercised its right to terminate the contracts for the transactions with immediate effect.” “In the absence of any alternative purchasers or sources of funding for the SA [Stobart Air] business within the timescales required, Esken has advised the board of SA that it will not continue to provide financial support to the business going forward.” “As a result of this, the Board of SA has terminated its franchise agreement with Aer Lingus, will cease trading and is taking steps to appoint a liquidator.” Esken will also continue to fund the lease obligations on eight Avions de Transport Régional turboprops through to the termination of the leases in April 2023. However, with Stobart gone, it will now take immediate steps to find sublease placements for the aircraft with alternative operators to mitigate the impact on the Group. Esken said it also remains responsible for certain, albeit unspecified, obligations to Aer Lingus under the franchise agreement which were also the subject of a pre-existing guarantee and have become payable following termination of the franchise agreement. “These obligations and the guarantees entered into in early 2017 were the reason that the Group reacquired the airline and its related leasing company [Propius] in April 2020. This enabled the Group to manage and seek to mitigate the impact of these liabilities following the administration of Connect Airways Limited,” it added. Insofar as Carlisle Lake District Airport is concerned, Esken said it would retain ownership of the airfield. However, it will now actively explore other options including other potential alternative commercial opportunities for the airport.