Firm behind Stobart Air makes first profits since 2010
The company behind Dublin-based Stobart Air, the airline that operates the Aer Lingus regional service, made a €483,000 (£406,000) profit last year, according to its latest accounts. It is the first time since 2010 that Stobart Air, which was formerly known as Aer Arann has made a profit.
Turnover Everdeal Holdings, the company behind the business, rose by 6% to €122.5m (£103m) in 2015.
Details of the performance came as Stobart Air, which majority-owned by the UK transport group Stobart, pursues a standalone strategy after eschewing a planned €80m takeover by CityJet earlier this month.
The pair had been in talks for almost a year about the takeover, which would have seen CityJet add considerably to its services.
Stobart recently hired former easyJet chief operating officer Warwick Brady as its deputy chief executive. The chief executive is Andrew Tinkler. Mr Brady's role includes developing Stobart's strategy for its aviation business. The group also owns London Southend Airport.
Mr Brady faces dual challenges of weakened sterling and rising oil prices in helping to pilot Stobart Air.
About half Everdeal's revenue is generated in Ireland and the rest in the UK. Of its turnover, €110.5m (£93m) was from ticket sales, €4.8m (£4m) from charter and wet lease operations, and €7.1m (£6m) from other services.
The accounts for Everdeal note that its performance in 2015 was driven by increased yield on franchise operations, cost restraint, favourable exchange rates and a "highly disciplined and commercial approach to route profitability".
Almost the entire performance for 2015 reflects the operation of the Aer Lingus Regional service, but includes three routes operated on behalf of Flybe.
The accounts show that Stobart Air's load factor was 69% during 2015, up from just 54% in 2014.
The average passenger fare, meanwhile was €35.94 (£30) in 2015, compared to €34.14 (£28.7) in 2014.
Everdeal deposited €3.2m (£2.7m) into what it described as a "franchise enhancement fund" with a franchise partner.
"The cash profile of the business remains subject to seasonal fluctuations associated with operating in the aviation industry," the directors noted in the accounts. "Liquidity concerns have been addressed through the provision in the prior year of funding by a corporate shareholder of the group."
The company also entered into derivative foreign currency contracts in 2015 for the purchase of $21.8m. That covered an estimated 46% of its total dollar requirement for 2016.
After the year-end, Everdeal entered into fuel hedge for 9,870 tonnes of fuel. That, combined with a pre-existing derivative contract, accounted for an estimated 76% of the group's fuel requirement for 2016.
"The group's liquidity position has significantly improved during 2015, with the trading profitably for the first time since 2010," the accounts noted.
Stobart Air's former managing director was Sean Brogan. He left the airline earlier this year after a management buyout bid he made for the carrier was rejected by Stobart.