€80m merger between Cityjet and Stobart Air is called off
The potential €80m merger between CityJet and Stobart Air has been called off.
It’s understood that the decision to cancel the much-anticipated deal was made only within the last 48 hours.
The decision not to proceed with the merger casts doubt over the future direction of Stobart Air, and also, ultimately whether it will continue operating with an Irish Air Operator’s Certificate, or one from the UK.
Pat Byrne, the executive chairman and founder of CityJet, told Independent.ie that he was “flabbergasted” that the planned deal had been derailed.
“It is disappointing. It would have been a very good fit for all parties concerned, including the staff.”
He said that CityJet has spent about €1m on advancing the merger. That includes various fees for undertaking due diligence, and legal services.
Mr Byrne said that following a weekend board meeting, CityJet gave Stobart an ultimatum to accept the merger. That deadline expired yesterday.
“You are either getting married or you’re not,” said Mr Byrne. “You don’t want to be left waiting at the altar.”
“CityJet will continue to develop our aggressive growth strategy in Europe but regrettably this will not now include the acquisition of Stobart Air.”
A Stobart statement yesterday said it had decided to “end discussions with CityJet about a possible collaboration between the airlines.”
“These discussions explored a range of options, including a change of ownership. Following consideration...the Board has concluded that the agreement with CityJet is not in the commercial interest of the Group. We wish everyone at CityJet well.”
Stobart said its Aer Lingus Regional Services will continue to grow, with a continued emphasis on growing passenger numbers across our 31 routes throughout Ireland, the UK and France.
Stobart added that it would further develop its services at London Southend airport through an expansion of its partnership with Flybe.
CityJet slashed its losses last year to €10m from €30m in 2014, marking a significant change in its fortunes.
Byrne said it was a “phenomenal turnaround” for the carrier, which he re-acquired earlier this year with aviation industry backers.