UK low cost carrier Stobart Group has said in a trading update that the firm will require additional liquidity to deal with the drop in passenger number, while separately stating that talks on offloading its 25% in London Southend Airport were stalled, both due to Covid19.
In the statement Stobart said that passenger numbers were down at its Southend Airport hub and that carriers which fly from the airport have cautioned they will take s significant route cancellations.
“Given the current market conditions, additional liquidity is likely to be required and the Stobart Group is actively reviewing the most appropriate sources of funds to cover the period during which the airport is affected by the COVID-19 virus. In addition, the Group has moved swiftly to take measures to conserve cash and reduce its cost base in order to provide further resilience through this period.”
Stobart said that a number of guarantees and potential lease obligations exist between the Group and the separate subsidiaries of Connect Airways…which have been impacted by the collapse of Flybe.
“Stobart Group is actively evaluating how best to address and manage these liabilities and is in discussion with stakeholders regarding the most appropriate solutions,” said the statement.
In a separate announcement Stobart Aviation, a group subsidiary confirmed speculation regarding a potential sale of 25% of London Southend Airport, and said it had been in detailed discussions “for several months” with another party which valued the airport between £700-800m. It said that discussions have since been put on hold while both parties navigate the current COVID-19 outbreak.