Aer Lingus Regional service operator Stobart Air and related aircraft leasing business Propius have burned through close to £15 million in cash since they were acquired by Stobart Group in April of this year.
As reported by The Irish Independent, Stobart Group said that selling Stobart Air is still a priority for the company.
Stobart Group also said that it incurred a non-cash charge of £55 million during the first six months of its current financial in relation to its acquisition of Stobart Air and Propius, and noted that at the end of February of 2020, it held provisions amounting to over £11.3 million that related to a number of tax enquiries across the company that "management is working with HMRC (Her Majesty’s Revenue and Customs) and professional advisers to satisfy and resolve".
Stobart Group added that during the first half of its current financial year, "an increase has arisen" amounting to £3.3 million following the acquisition of Stobart Air and Propius, resulting in a £1 million rise in total provisions.
Trading Outlook Has "Deteriorated Significantly" Since Capital Raise In June
Stobart Group raised £100 million from investors in June to shore up its balance sheet.
The Irish Independent quotes Stobart Group as saying, "The trading outlook for Stobart Air has deteriorated significantly since the capital raise due to the continued quarantine arrangements in Ireland, with limited flights operating.
"We are taking immediate action to seek an exit from Stobart Air and Propius before the end of the current financial year.
"The first step has been to reduce costs. This has included negotiating rate reductions with key suppliers, making redundancies, exercising temporary layoffs, putting in place temporary pay cuts and utilising the Irish employee subsidy schemes.
"We are also engaged in a competitive tender process in order to put in place a 10-year commercial agreement with Aer Lingus from 2023."
Stobart Air's current contract to operate Aer Lingus Regional services expires at the end of 2022.
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