Stobart Group shares down 8% amid easyJet blow

Stobart Group's London Southend Airport

Shares of Carlisle-based aviation and energy infrastructure firm Stobart Group fell about 8% on Tuesday after it issued a stock exchange statement of the impact on its business of easyJet’s closure of its bases at London Southend and London Stansted airports, amongst others.

Stobart Group owns and operates London Southend Airport and Carlisle Lake District Airport.

“easyJet currently has four aircraft based at London Southend Airport serving 21 destinations and carried 1.05 million passengers during FY20,” said Stobart Group.

“These are leisure-focused routes, which Stobart Group expects to be attractive to other airlines.

“Stobart Aviation Services provides check-in and baggage handling services to easyJet at both London Southend and London Stansted airports.

“As a result of the decision to close these airport bases, Stobart Aviation Services will enter a consultation process with the teams affected by this as part of a wider cost management programme within the Aviation division.

“London Southend Airport has also commenced a consultation process with its team in view of the challenges presented by COVID-19 and the resulting impact of blanket quarantine measures implemented by the UK Government, which now includes key markets such as France, Spain, Malta, the Netherlands and Portugal.

“As previously stated in the AGM Statement on 30 July 2020, the Stobart Group board carefully stress tested the group’s liquidity position under a variety of operating scenarios at the time of its successful capital raise in June 2020.

“As a result, the board remains confident in the group’s balance sheet, liquidity position and the medium-term opportunity for its key strategic London airport asset.”

Stobart Group CEO Warwick Brady said: “We are disappointed that easyJet has taken the decision to close its airport bases serving the North and East of London.

“However, we expect that this decision will create significant opportunity for other airlines looking to take on established, popular and profitable routes.

“London Southend Airport has a catchment area in excess of 8 million people, regular direct trains from London Liverpool Street in 51 minutes and can offer a cost-efficient base of operation for airlines with an increasingly enhanced passenger experience for post-COVID-19 travel.

“Though the 2020 Summer and Winter periods will continue to be challenging, we expect passenger demand for short haul leisure flying to increase through 2021, and we are in active dialogue with airlines regarding their interest in capitalising on these well-established, profitable routes.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.