Aer Lingus regional operator forecasts route growth
Stobart Group reported a six-fold earnings increase for its aviation business
Graeme Buchanan, managing director of Stobart Air, with group chief executive Warwick Brady. Photograph: Maxwells Dublin
The operator of the Aer Lingus regional franchise has said it plans to grow its route offering as the IAG-owned carrier grows its transatlantic offering.
Stobart Air, which turned a profit for the second time since taking over the brand from Aer Arann in 2010, confirmed it was happy with the performance of its contract with Aer Lingus, which runs out in December 2022, and said it hopes to develop the franchise in the future.
After reporting interim results for the six months to the end of August, Stobart chief executive Warwick Brady outlined the likelihood of route growth with the now IAG-owned Aer Lingus brand. “I think you’ve got to have to see route growth. Because we’ve got an exclusive contract that has route deliver passengers in Dublin, I think we’re going to have to find a way to increase capacity with Aer Lingus.”
Asked about Aer Lingus’s appetite for growth of its regional business, Mr Brady told The Irish Times: “They’re going to need it, whether they want it or not. If you’re going to put on new transatlantic routes and you want to get people to Edinburgh, you’re going to need more capacity to Edinburgh and we’ve got an agreement that only we’re going to fly Edinburgh with Aer Lingus.”
Revenue for Stobart Air, which also owns London Southend Airport and runs routes for Flybe, increased from £12 million to £97.5 million in the period. Earnings before interest, taxes, depreciation and amortisation increased six-fold compared to last year to £6.2 million.
Recent speculation has suggested the airline was looking at buying the Exeter, UK-based Flybe. However, Mr Brady poured cold water on that idea saying, “We’re focusing on our regional business, making it a valuable attractive business. We’re not looking at it [Flybe] at the moment.”
Accounts for the group as a whole, which includes logistics, energy, rail and investment arms, show a 90 per cent increase in revenue to £124.6 million driven by “significant returns” from its investment in Eddie Stobart Logistics. Additionally, the company sold and leased back eight of its ATR aircraft – a move that generated “significant cash”.
Company owned Southend Airport, the sixth biggest in London, recorded a 25 per cent increase in passenger numbers to 610,492 while revenue per passenger dropped slightly to £21.03.
“Passenger numbers at London Southend Airport and our regional airline are up year-on-year as we continue to invest across the sector to meet the demands for increased capacity and improved customer experience. We are exploring ways to further develop this portfolio across our airport and airline asset base,” Mr Brady said.
Speaking on Stobart’s group presence in Ireland, Mr Brady signalled that the country formed a “very important part” of the company’s strategic development.