Stobart Group confirms own airline “not directly impacted” by Flybe collapse

Aviation and civil engineering firm Stobart Group has commented on the collapse of airline Flybe and its investment into Connect Airways.

Stobart Group was part of a consortium of shareholders that formed Connect Airways to take control of Flybe assets in July last year, with a 30 per cent stake in the business. Cyrus Capital and Virgin Atlantic both held 40 per cent stakes in the company.

Connect Airways invested more than £135m to keep Flybe operational, but in the wake of the spread of COVID-19 the airline has been unable to continue operations and has gone into administration.

Commenting on the investment, the group said: “Stobart Group’s initial investment was made up through the sale of Stobart Air and its aircraft leasing business, Propius.

“As a result, the non-cash balance sheet impact on Stobart Group is £43.3m and the additional £7m investment made in 2020.

“The group has confirmed that the value of both these investments will now be written down to £nil on its balance sheet.”

The group also confirmed that as Stobart Air is not a wholly owned subsidiary of Connect Airways - with Stobart Air’s Employee Benefit Trust (EBT) controlling 60 per cent of the voting rights and Connect Airways controlling 40 per cent - Flybe’s collapse will not have a ‘direct impact’ on Stobart Air trading.

It did however indicate that Stobart Group-run airport London Southend would see a ‘short-term impact’ as a result of the Flybe collapse.

The group commented: “Flybe had shown promising signs of a turnaround despite the delay to receiving merger control clearance from the European Commission for its acquisition.

“However, despite the best efforts of all, not least the Flybe people, the impact of COVID-19 on Flybe’s trading means that the consortium can no longer commit to continued financial support.

“As a result of this news, London Southend Airport will see a short-term impact, with Flybe having planned to operate ten routes from the airport from Spring of this year. However, the long-term prospects of that airport remain compelling.”

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