Stobart Air planning for future base on the Isle of Man

Fleet: Stobart Air operates the Aer Lingus Regional service. Photo: Aidan Crawley/Bloomberg

John Mulligan Twitter Email

May 05 2020 02:30 AM

AER Lingus Regional operator Stobart Air is considering adding a new base in the Isle of Man, but the Dublin-based carrier has been told by Aer Lingus that it won't support any such move, the Irish Independent understands.

That would leave struggling Stobart Air having to deploy a new, separate booking engine for the new services.

Stobart Air and its Stobart Group owner have tapped the Isle of Man government for support, it's believed.

The carrier is also understood to be eyeing up a possible base in Belfast.

Stobart Air operates the Aer Lingus Regional service under a franchise agreement. The current contract expires at the end of 2022.

"The current challenges facing the aviation industry are unprecedented, with the demand for airline services at an all-time low globally. The impact of the Covid-19 pandemic is unparalleled," said a Stobart Air spokesperson.

They added: "Like all businesses, we are assessing the impact of this pandemic on our airline and are focusing on the future, considering our post-Covid operations and evaluating opportunities for the business."

The UK's Stobart Group recently acquired Stobart Air from EY, the administrator of Connect Airways, of which Stobart Air was a part.

Stobart Group has pledged an initial €25m to Stobart Air, but a majority of that will be consumed by aircraft lease payments and aircraft maintenance costs.

Stobart Group said last week that in the event Stobart Air does not secure an extension to its Aer Lingus contract beyond 2022, the group's Propius leasing unit will shoulder a $21.2m (€19.4m) break fee in April 2023 payable to German firm Goal.

Propius has eight aircraft leased from Goal that are used by Stobart Air. It's understood that on top of the break fee, the cost of handing back each aircraft could be in the region of $1.3m.

It's also unclear if Propius would also be liable for lease payments on the eight aircraft between January 2023 and April 2023 should a new contract not be secured. Stobart Group did not respond to a request for comment.

Stobart Air, whose managing director is Andy Jolly, was operating successfully until the pandemic struck, with more than 1,000 flights a week between Ireland and the UK.

It had also strengthened its board in 2018 with the appointment of aviation veteran Conor McCarthy as non-executive chairman. He stepped down from the role last September.

Early last year, Stobart Air's staff were ostensibly given a 51pc stake in the airline by Stobart Group - which then owned it entirely - as it sought to ensure the Dublin carrier would remain in compliance with EU airline ownership rules post-Brexit. The move was approved by the Commission for Aviation Regulation.

Some workers have said they weren't informed until this year that they had the stake.