independent

Wednesday 16 April 2014

Stobart plan to expand service boosts Aer Arann

One of Aer Arann's major owners – British transport group Stobart – is looking at ways to boost passenger numbers through Southend Airport in the UK, by extending its geographic reach.

The new Southend Airport, also owned by Stobart, has become a valued part of the Aer Lingus Regional strategy.

Aer Lingus Regional is operated by Aer Arann under a franchise agreement.

Releasing first-half results yesterday, Stobart said that its investment in Aer Arann is "progressing well".

Stobart owns 45pc of Aer Arann, with the airline's former boss Padraig O Ceidigh selling up at the end of 2012.

Invesco Asset Management also owns about 45pc with London-based Cenkos Securities owning 10pc.

Stobart said that 70,000 passengers a year are now travelling between Dublin and Southend on Aer Lingus Regional, which carries about 1.1 million passengers a year.

Aer Arann wants to increase its annual passenger numbers to two million by 2018 and become Europe's leading regional airline by 2015.

The carrier flew its first service between Dublin and Newcastle yesterday.

"Opportunities are being considered to increase passenger throughput at London Southend airport using a similar model," said Stobart in its interim results.

REPLICATE

Earlier this year, Aer Arann said it was planning to replicate the Aer Lingus Regional model using London Southend as a UK base and servicing Scotland, Benelux and France.

Some of those new routes could begin next spring.

Aer Arann interim chief executive Sean Brogan said at the time the airline's management is trying to create a "franchise flying" platform.

"That could take us anywhere," he said." It's a global product. Once you've got the basics right, it should be something you can just plug and play."

Earlier this year, Aer Arann and Aer Lingus signed a 10-year extension to the franchise agreement.

Aer Lingus also paid €10.5m for a 33pc equity stake in a company used to buy new aircraft that are leased to Aer Arann.

Stobart said yesterday that aside from its investment in Aer Arann, it will also generate future returns from its investment in the leasing venture.

Aer Arann came under intense pressure during the summer when its 100 pilots threatened to strike over pay issues. The dispute was eventually resolved.

Irish Independent

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