Stobart Air makes profit as turnover hits €122m
The company behind Dublin-based Stobart Air, the airline that operates the Aer Lingus Regional service, made a €483,000 profit last year.
According to newly-filed accounts for the business it's the first time since 2010 that the business made a profit. Stobart Air was formerly known as Aer Arann.
Turnover at the company behind Stobart Air - Everdeal Holdings - rose 6pc to €122.5m in 2015.
Details of the performance come as Stobart Air - majority-owned by the UK-based transport group Stobart - pursues a standalone strategy after eschewing a planned €80m takeover by CityJet earlier this month.
The pair had been in talks for almost a year about the takeover, which would have seen CityJet add considerably to its services.
Stobart recently hired former EasyJet chief operating officer Warwick Brady as its deputy chief executive. Its chief executive is Andrew Tinkler. Mr Warwick's role includes developing Stobart's strategy for its aviation business. The group also owns London Southend Airport.
Mr Brady faces dual challenges of weakened sterling and rising oil prices in helping to pilot Stobart Air. About half of Everdeal's revenue is generated in Ireland and the remainder in the UK. Of its turnover, €110.5m was from ticket sales, €4.8m from charter and wet-lease operations, and €7.1m from "other" services. The accounts for Everdeal note that its performance in 2015 was driven by increased yield on franchise operations, cost restraint, favourable exchange rates, and a "highly disciplined and commercial approach to route profitability".
Almost the entire performance for 2015 reflects the operation of the Aer Lingus Regional service, but includes three routes operated on behalf of UK regional carrier Flybe.
The accounts show that Stobart Air's load factor was 69pc during 2015, up from just 54pc in 2014. The average passenger fare was €35.94 in 2015 compared to €34.14 in 2014. However, the average total revenue per passenger rose to €98.28 in 2015 from €95.03 in 2014.
During 2015, Everdeal deposited €3.2m into what it described as a "franchise enhancement fund" with a franchise partner.
"The cash profile of the business remains subject to seasonal fluctuations associated with operating in the aviation industry," directors note in the accounts. "Liquidity concerns have been addressed through the provision in the prior year of funding by a corporate shareholder of the group."
The company also entered into derivative foreign currency contracts in 2015 for the purchase of $21.8m. That covered an estimated 46pc of its total dollar requirement for 2016.
After the 2015 year end, Everdeal entered into fuel hedge for 9,870 tonnes of fuel. That, combined with an pre-existing derivative contract, accounted for an estimated 76pc of the group's fuel requirement for 2016.
Stobart Air's former managing director was Sean Brogan. He left the airline earlier this year after a management buyout bid he made for the carrier was rejected by Stobart.
"The group's liquidity position has significantly improved during 2015, with the trading profitably for the first time since 2010," note the Everdeal accounts.
The business had a €27.8m shareholder fund deficit at the end of 2015.
The Irish Independent revealed earlier this month that former Aer Arann chairman, Senator Pádraig Ó Céidigh, has increased his stake in Stobart Air from 5pc to 10pc.