By Rachel Nelligan
The Stobart Group has taken a “small stake” in the form of a convertible preference share in trouble airline Aer Arann.
Day-to-day management of the airline will continue to reside with the Aer Arann team under current CEO Pádraig Ó Céidigh, the company said.
Aer Arann has amassed losses of around €18m since 2008.
Stobart has also agreed terms for a five-year operating agreement with Aer Arann to use London Southend Airport for flights starting in March 2011.
Stobart said it expects volumes will grow to 300,000 passengers annually. As part of the agreement, Stobart Group will invest €2.5m to “incentivise and market” Aer Arann’s operation from London Southend Airport.
The offer remains conditional on certain terms being satisfied including Aer Arann successfully exiting examinership.
The UK firm said it hopes Aer Arann will exit examinership before the end of the month.
The Stobart Group has interests in road, rail, sea and air freight and logistics in Ireland, Britain and Europe.
Sean Brogan, Managing Director, Stobart Ireland said: “This proposed alliance creates a platform to expand the reach and capacity of two complementary companies. Stobart Ireland has an excellent track record of sustainable growth. This alliance is in keeping with our strategic development plans in Ireland. Furthermore, it strengthens our competencies across the transport modes and positions us to maximize wider Stobart Group capabilities.
“In particular, the Aer Arann/London Southend combination offers significant potential. Aer Arann’s reputation as a regional carrier fits perfectly with our ambitions to develop London Southend Airport as a passenger and freight hub of choice.”
Aer Arann racked up losses of €6m in the first seven months of this year, of which, around €4.5m has been attributed to the volcanic ash cloud crisis in April. The company has amassed losses of around €18m since 2008.