Stobart Group Ltd (LON:STOB) said Aer Lingus has opted not to make Stobart the preferred supplier for a new commercial agreement due to start in 2023.
Stobart, which has already fully written down its investment in Stobart Air and Propius, said Stobart Air will continue to operate the Aer Lingus franchise until the end of 2022.
Should Stobart Air not be awarded a new commercial agreement, Stobart Group can exercise its right to an early break clause for the lease agreement of eight ATR aircraft in April 2023 at a cost to the group of US$21.2mln (plus finance and maintenance costs), thereby exiting its pre-existing parent company guarantees.
"The group remains in positive discussions with a number of interested parties and continues to target an exit from Stobart Air before the end of the current financial year,” said Warwick Brady, the chief executive officer of Stobart Group.
"Whilst a disappointing decision by Aer Lingus, we believe that Stobart Air is a strategic and attractive asset for a potential buyer with number of options open to it in terms of continued operations beyond its current franchise agreement with Aer Lingus. It is well placed to build on eight years of reliable, customer-focused connectivity between Ireland and the UK and utilise its European Air Operator Certificate to operate out of Ireland and seek further franchise or independent flying arrangements,” he added.
"Stobart Air can also leverage its valuable slot portfolio, and its position as Europe's largest and most experienced operator of ATR aircraft and enter negotiations with the new Aer Lingus franchisee given the anticipated interest in those assets,” Brady said.