Administrators overseeing Irish budget carrier EUjet and its main operating base, Kent International airport, are optimistic over prospects for securing investors in both, following the collapse of their UK parent company.
EUjet, which served around 20 European destinations, suspended operations in July after owner, Kent International operator PlaneStation, was forced into administration by the withdrawal of financial backer Bank of Scotland.
The airport and the airline have also been placed in administration. UK administrator Grant Thornton believes it can find a buyer for Kent International, while accountancy firm McStay Luby, the Irish examiner handling EUjet, indicates there is investor interest in EUjet’s potential as a wet-lease operator. Examiner John McStay says: “Discussions are continuing with possible investors who have expressed an interest in the wet-lease operation.”
Shannon-based EUjet is under creditor protection while the examiner looks for investors. Created by executives linked to Irish wet-lease operator TransAer – which itself collapsed in 2000 – EUjet began as a wet-lease and charter business, marketing Fokker 100s from lessor Debis AirFinance, before evolving into a scheduled budget airline. PlaneStation took an initial 30% share in EUjet last year. The airline began services from Kent in September 2004.
PlaneStation reinforced its ties with EUjet by acquiring control of the airline in January, after raising capital through a share issue. But PlaneStation warned it had exhausted other financing options; Bank of Scotland had threatened to discontinue its support and the company faced administration if the issue failed.
Despite steadily attracting passengers, EUjet failed to meet forecast demand. This exacerbated financial problems at PlaneStation, whose airport income had already been proving inadequate during EUjet’s start-up phase.
Formerly the Wiggins Group, PlaneStation’s plans to build an international network of secondary airports were beset by problems. It withdrew from Tennessee’s Smyrna airport in 2003 and is to abandon Germany’s Baltic Schwerin-Parchim airport because of poor revenue forecasts. It cut ties with Italy’s Cuneo Levaldigi airport and has experienced licence wrangles at Lahr Black Forest airport in Germany.
In 2001 the company was forced to revise five years’ worth of financial results – a move which turned its profits into losses – after financial regulators found it had not complied with corporate rules. PlaneStation sacked chief executive Oliver Iny and appointed turnaround specialist Martin May to revive the company. Investment in EUjet had been part of May’s attempts to provide additional revenue streams.
Source: Airline Business
