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Stobart Group mulls swoop for Dublin-based Stobart Air

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Talks: Stobart Air operates the Aer Lingus Regional service

Talks: Stobart Air operates the Aer Lingus Regional service

Talks: Stobart Air operates the Aer Lingus Regional service

The UK's Stobart Group is considering the acquisition of struggling Dublin-based Stobart Air in a move that would prevent the immediate crystalisation of significant liabilities the group has that are attached to the airline's aircraft leases, the Irish Independent understands.

It is one of the two likely near-term outcomes for Stobart Air, which operates the Aer Lingus Regional service.

The Irish Independent first reported last week that Stobart Air might also seek to have an examiner appointed to the carrier to provide protection from creditors as it fights for survival. Alternatively, Stobart Group would seek to buy a 49pc stake in Stobart Air from accountancy firm EY, which is the admin­istrator to UK-based Connect Airways.. Stobart Air is part of Connect. The other 51pc of Stobart Air is owned by its more than 400 staff.

But any deal would effectively require the support of Aer Lingus.

Stobart Air's current contract with the larger airline to operate the Aer Lingus Regional service expires in 2022.

Prior to the Covid-19 pandemic, Aer Lingus Regional primarily operated flights between Ireland and the UK, feeding passengers on to the Aer Lingus transatlantic network.

Connect was established last year to facilitate the acquisition of Flybe, the UK regional carrier that collapsed in February.

Connect Airways is 30pc owned by Stobart Group.

Virgin Travel Group, a subsidiary of Richard Branson-founded Virgin Atlantic, also has a 30pc stake, while a unit of US firm Cyrus Capital Partners owns 40pc.

If Stobart Group could buy the 49pc stake in Stobart Air, it might be able to prevent the carrier from falling into examinership.

"Stobart Group never comments on speculation or market rumour," said a Stobart Group spokesman.

Stobart Group has tens of millions of dollars in liabilities for guarantees given in relation to a number of aircraft leases.

A subsidiary of Stobart Group, Propius, engineered a sale and leaseback of eight aircraft to German firm Goal in 2017. The aircraft are used for the Aer Lingus Regional service. Lease agreements under the deal total $15.4m (€14.1m) a year and are for 10 years, it was reported at the time.

Irish Independent