Saturday 10 December 2016

Stobart Air sale to CityJet set to close next week

Published 19/08/2016 | 02:30

CityJet boss Pat Byrne pictured with Ireland football manager Martin O'Neill earlier this year, as the airline was named official airline partner of the Football Association of Ireland
CityJet boss Pat Byrne pictured with Ireland football manager Martin O'Neill earlier this year, as the airline was named official airline partner of the Football Association of Ireland

A deal to sell Aer Lingus Regional operator Stobart Air to CityJet looks set to close next week, the Irish Independent understands.

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It's believed that UK-based aviation financing group Falko, which is supported by affiliates of funds managed by Fortress Investment Group, is closely linked to the deal.

CityJet is also preparing to base aircraft at London Southend Airport, which is owned by UK-based Stobart Group.

It's believed that Stobart Air will be sold for about €80m, which includes the acquisition of a leasing firm that acts as a holding company for a chunk of the airline's fleet.

The deal is likely to result in Stobart Air and CityJet being operated as two separate entities for at least the time being.

However, synergies are certain to be eyed at a later stage.

It's believed a deal could be structured that will see Stobart Air first acquire all the shareholdings of existing investors, before the carrier is then sold to CityJet.

The Stobart Group owns 45pc of Stobart Air, with 40pc held by Invesco Perpetual. Broker Cenkos owns 10pc, and former Aer Arann chairman Padraig O'Ceidigh owns 5pc.

The airline was previously known as Aer Arann, and was acquired out of Examinership by Stobart and its investment partners.

Invesco indicated last year that it wanted to exit Stobart Air, prompting a sales process.

In June, former Stobart Air chief executive Sean Brogan left his role after a €65m management buyout plan was rebuffed.

Stobart Air operates the Aer Lingus Regional Service under a franchise agreement with Aer Lingus. While a change of control at Stobart Air could conceivably have meant the franchise agreement could be terminated, it's understood that Aer Lingus has given its approval for the takeover by CityJet.

Stobart Air also operates some services for Flybe.

CityJet, whose main base is at London City Airport, is headed by Pat Byrne. He founded the airline, which was eventually a subsidiary of Air France-KLM.

It sold CityJet to Germany's Intro Aviation, which this year sold it back to Mr Byrne and a group of backers.

Falko has worked closely with CityJet in the past, including helping to finance the carrier's acquisition of new Sukhoi Superjet aircraft.

CityJet has also taken delivery of a number of new Bombardier CRJ900 aircraft.

They're being used by CityJet's Blue1 subsidiary, which operates regional routes on behalf of Scandinavian carrier SAS.

Irish Independent

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