MIAMI – Holding company Connect Airways and subsidiary airlines have fallen into administration under Ernst & Young’s (EY) firm’s control.
“Alan Hudson, Joanne Robinson, Simon Edel and Lucy Winterborne of EY’s Restructuring team were appointed joint administrators of Connect Airways Limited on March 10, 2020,” said EY in a statement published in the Irish Independent.
“Owned by a consortium of companies, Connect is a holding company that was set up in January 2019 to assist with the acquisition of the airline Flybe. Connect has no day-to-day trading operations itself,” added the firm.
The new management comes after Flybe (BE) collapsed since the airline is also part of the holding company. As the British consortium operates Stobart Air (RE), which is behind the Aer Lingus (EI) regional service, EY has now total control of the company and owns 49% of RE.
Operations implied amid old and new ownership
The other owners of Connect Airways are UK Stobart Group by 30%, Virgin Travel Group, a subsidiary of Virgin Atlantic, by 30% and US firm Cyrus Equity Partners with 40%
Even though Stobart Group’s CEO, Warwick Brady previously said to investors that it was evaluating how to manage liabilities, the administration situation now means that the company is under firm arm regarding its guarantee of aircraft leases by US$15.4m per year in a lapse of ten years.
However, the agreement could end in 2023. RE’s owner group has an agreement with EI to end the contract in 2022. Propius, one of the subsidiaries, engineered a sale and leaseback of ATR turboprop aircraft to the Irish carrier for US$62.7m, according to the Irish Independent.