Since Covid-19 first arrived on our shores last year, few sectors of the economy have been as affected by it as aviation.
With all non-essential travel banned and the vast majority of ground flights, the area has been torn apart by the pandemic.
The ripple effects have been widespread – affecting not only airlines, but also airports, the people who work in the industry and the myriad suppliers of the industry.
Tourism has also been significantly disrupted, due to connectivity cuts and strict restrictions on cross-border movement.
Against this backdrop, it was inevitable that airlines serving the island would face significant challenges.
CityJet entered (and has since left much smaller) the review.
This restructuring process was also used by Norwegian, which operated transatlantic routes from Ireland.
Although it has also reduced its services, Ryanair’s size and strong balance sheet have kept it going, and it is now well positioned for the recovery, whenever it presents itself.
Although it has lost hundreds of millions of euros, Aer Lingus has also coped because it has the backing of giant parent company International Airlines Group.
But it has also had to significantly reduce its services and staff, more recently announcing the closure of its cabin crew base in Shannon.
On the other hand, Stobart Air, the regional service provider of Aer Lingus, has faced even greater difficulties and is now facing liquidation.
The writing had been on the wall for some time for the little wearer, however.
Not only has its flight schedule been cut by 94% since the start of the pandemic, but it has followed a turbulent period where control of the carrier has changed hands on several occasions.
It has also become increasingly likely that he is set to lose Aer Lingus’ regional contract when it expires at the end of next year.
Conor McCarthy’s new company, Emerald Airlines, has been granted preferred bidder status and a memorandum of understanding is expected to lead to a final contract soon.
Without the activity of Aer Lingus, Stobart Air would be considerably reduced.
In April, the owners of the company, Esken (formerly Stobart Group), announced that it would be sold to Ettyl, a new Isle of Man-based company run by young boss Jason Scales.
But two weeks ago, Ettyl told Esken that his initial financing plan to support the deal was no longer available and that he was in discussions about alternative options.
“It is now clear that Ettyl is unable to complete the transactions on the original terms or secure alternative financing on time,” Esken said in a statement today.
“Esken therefore exercised its right to terminate the contracts for transactions with immediate effect.”
But the decision was to have a bigger impact than this specific agreement.
Esken said that in the absence of other buyers or sources of funding for the Stobart Air business on time, it has informed the Stobart Air board of directors that it will not continue to provide financial support. to the company in the future.
“As a result, the board of directors of Stobart Air has terminated its franchise agreement with Aer Lingus, will cease operations and is taking steps to appoint a liquidator.”
Ettyl has not commented on what went wrong at its end.
But on Twitter, Jason Scales said that “the past few weeks have been some of the most difficult I’ve ever been.”
“After issues were reported with an Etyl backer, we fought to secure a deal that saved #StobartAir.”
“My thoughts are with all of the amazing Stobart Air employees today. I’m sorry.”
The situation already leaves Aer Lingus under pressure in a real traffic jam on the 12 routes, at least in the short term.
It decided to operate five of the routes itself, a decision made possible by the fact that it currently has many under-utilized aircraft.
Two more will be organized for at least next week by BA City Flyer.
The Dublin / Donegal and Dublin / Kerry routes under the public service obligation will also need to be dealt with expeditiously.
This leaves three other routes with no short-term solution.
In the medium and long term, the question now is whether an agreement can be reached with Emerald Airlines that would allow it to enter the breach much sooner than expected.
But setting up air services is not easy and beyond planes, pilots and crews, there is also the issue of licenses and other regulatory obstacles to overcome.
On the business side, it’s also not clear whether Emerald Airlines would want to close a deal at this point, when there is still so much uncertainty around international travel.
This, in turn, puts stress and pressure on the government.
He has been sharply criticized by everyone in the aviation industry for months now for his cautious approach to reopening international travel and the perceived lack of a plan to save and rebuild the industry.
Last November, he announced funding of â¬ 80 million, although it is primarily intended for airports rather than airlines.
Airlines have benefited from wage subsidy programs and Aer Lingus has used the Irish Strategic Investment Fund’s pandemic stimulus fund.
But until they can fly back on the plane with decent passenger volumes, carriers continue to stall, capacity remains limited, and other countries with less cautious prospects are seizing the new open routes.
Regional cities and communities with small airports are also facing a restart of the tourism sector, with serious concerns about their connectivity in the future.
It is a complicated and difficult situation for all concerned and will not be resolved quickly or easily.
A serious problem too, with the future of connectivity to and from this air transport dependent island now at stake.