LONDON – Eastern Airways owner, Bristow Group, has revealed a further loss in the 1Q19 as it revealed that slowing demand in the North Sea offshore oil market has affected the group’s profitability.
This comes at a crucial time for the group as it seeks to secure funding beyond the end of June 2019, warning that if funds are not found, then measures to wind down operations could begin.
Bristow President and CEO L. Don Miller stated, “Bristow is working diligently with its financial and legal advisors to best position the company for the future, both financially and operationally.”
“The steps we are announcing today will afford us additional time to continue our efforts to complete our financial reporting process and address our capital structure.”
“Most importantly, we are, as always, focused on continuity of service in a safe, reliable and professional manner for our valued employees, clients and passengers, as we continue to navigate a challenging market.”
Bristow Helicopters Limited is a British civil helicopter operator which is now part of the U.S.-based Bristow Group which in turn has its corporate headquarters in Houston, Texas.
The group comprises a vast network of worldwide helicopter operations, one of which includes the UK Search and Rescue contract which is provided utilising a mix of Sikorsky S-92s.
The group holds controlling interests in Eastern Airways, a regional airline based in the U.K. along with Australian regional carrier Airnorth.
Both Eastern Airways and Airnorth operate scheduled passenger services, and a vast amount of shuttle flights for oil and gas industry personnel, and various charter services.
In October 2017 Eastern Airways became a franchise partner of UK Regional airline Flybe.
Initially operating services to the Scottish Islands, in competition with Loganair, this initiative in partnership with Flybe ultimately failed after only 5 months.
Thereafter the airline has operated a variety of flights on behalf of Flybe.
After much promotion of a new connection from Aberdeen to London City (via Newcastle) at the start of 2019, this service, operated by Eastern Airways on behalf of Flybe, was discontinued after only 4 months of operation and the last flight operated on April 5, 2019.
Shares in Bristow plummet
Following news that the airline has failed to improve on their 2018 first-quarter results, shares of Bristow Group Inc sank to a new 52-week low.
The company’s stock fell to as low as $0.45 yesterday after opening at $0.69. By the end of the day, the company’s stock was valued at $0.62 a share for a loss of 41.93%.
As part of the strategic financial review process, Bristow has elected not to make an interest payment of approximately $12.5 million which was due to be paid by April 15, 2019.
Under the terms of the relevant indenture, the Company has a contractual grace period of up to 30 days during which it may elect to make the interest payment and cure any related default.
Bristow believes it is in its best interest to use the grace period to continue working with its advisors and creditors to review alternatives for improving its capital structure.
Therefore the group continues to look for secure funding to carry it through till the end of June 2019.
News of the Bristow group financial woes poses further questions about the future of regional carriers such as Eastern Airways.
As Flybe continues with the Virgin Atlantic and Stobart Air deal in the near future, one is left to wonder what benefit Flybe sees in maintaining Eastern Airways a franchise partner.
As we continue through 2019, the aviation industry as a whole is clearly proving to be in quite a challenging place.