Sale of Ireland's Stobart Air in jeopardy

13.10.2020Talks between Falko Regional Aircraft, a lessor that controls CityJet (WX, Dublin Int'l), and Stobart Group over the sale of Irish regional specialist Stobart Air (RE, Dublin Int'l) are in jeopardy as the future of the latter's crucial contract with Aer Lingus (EI, Dublin Int'l) is uncertain, the Irish Independent has reported.

While some unnamed sources said that the negotiations had all but collapsed over a number of factors, including Stobart Air's USD100 million liabilities, other sources said that talks were ongoing but an offer had yet to be tabled.

Stobart Air currently depends entirely on its regional contract with Aer Lingus, wherein it operates all of its aircraft - one ATR42-600 and twelve ATR72-600s - under the Aer Lingus Regional brand. However, reports have recently surfaced that Aer Lingus launched a tender for an operator of these services after the end of 2022, instead of extending the current deal with Stobart Air. Should Stobart Air lose the contracts, its business model would be in jeopardy.

Stobart Group hopes to finalise the sale of the airline by February 2021. The holding said that it was "engaging actively with a number of parties interested in acquiring its stake in Stobart Air".