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Sasko Lazarov/Photocall Ireland

CityJet and Stobart Air asked government for six-month bailout to ensure their survival after Covid-19

The airlines accounted for over 13% of air traffic at Ireland’s airports before the pandemic.

TWO REGIONAL AIRLINES asked the government for a six-month bailout to ensure their survival beyond the Covid-19 crisis.

In a co-signed letter to Minister for Finance Paschal Donohoe in April, Stobart Air and CityJet said they required “immediate grant support in order to survive” the pandemic.

The airlines accounted for over 13% of total air traffic at Ireland’s airports before the pandemic, when they also employed over 1,700 staff between them.

The letter, released to TheJournal.ie under the Freedom of Information Act, came days after the High Court appointed an interim examiner to CityJet, which is based in Dublin but is best known for flying routes out of London City Airport.

The previous month, Stobart Air – also based in Dublin -  ceased all international flights due to what it described as an “unprecedented” drop in demand as a result of Covid-19.

In their letter to Donohoe, Stobart Air’s Managing Director Andy Jolly and CityJet CEO Pat Byrne warned that regional airlines were not viable without a steady income.

They also warned that ongoing fixed costs were “eating away at evaporating cash reserves while aircraft sit on the ground with a dramatic collapse in revenues”.

“There will undoubtedly be a resurgence in demand for regional flying across both northern Europe (in the case of CityJet) and Britain and Ireland (in the case of Stobart Air),” they continued.

“These two Irish companies should be preserved to meet that demand.”

The letter asked the government to follow other European countries by showing “decisive and unwavering support” in the form of capital grants for six months, claiming this would support up to 1,000 Irish jobs in the long-term.

However, it also criticised the government for failing to assist the sector sooner.

“It is surprising and disappointing that the prominence of the commercial aviation business, which accounts for 88% of overseas travel to Ireland is currently being overlooked in the overall success of the state,” Jolly and Byrne wrote.

Jolly and Byrne added that they would seek to participate in the economic recovery after the crisis, and said they would await a review of the matter by Donohoe.

On Friday, Aer Lingus announced up to 500 job losses as a result of the impact of Covid-19, which it said was having a “catastrophic effect on the aviation industry”.

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    Mute Craig Ruth
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    Jun 21st 2020, 8:54 AM

    Still don’t know how big business aren’t expected to put money aside in case of these worst case scenario. Wimbledon has the foresight to pay pandemic insurance since 2002 and wont feel the hardships other big business will feel. The prob is greed. Why should we pay for something that might never happen. Well it did happen and your greed should cause your business to burn

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    Mute Peter
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    Jun 21st 2020, 11:31 AM

    @Craig Ruth:

    Let’s hope their insurance company doesn’t it feel before they get their payout

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    Mute Peter
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    Jun 21st 2020, 9:06 PM

    @Peter:

    I can’t even fix my autocorrect. I have no idea.

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    Mute brian reid
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    Jun 21st 2020, 8:26 AM

    Don’t let Michael O Leary know ….he will bring them to court

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    Mute Peter
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    Jun 21st 2020, 11:32 AM

    @brian reid:

    He’d buy them out

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    Mute Dave Connolly
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    Jun 21st 2020, 7:35 AM

    Are they not both owned at least in part by Aerlingus?

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    Mute Realist
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    Jun 21st 2020, 7:43 AM

    @Dave Connolly: No, they operate wet lease services on behalf of Aer Lingus

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    Mute Tony Stanley
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    Jun 21st 2020, 11:33 AM

    @Dave Connolly: No not even slightly. They operate services in franchise with Aer Lingus.

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    Mute David Walters
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    Jun 21st 2020, 11:12 AM

    Let them fold. They are just middle men.
    Sell off the slots.

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    Mute Bran Brans
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    Jun 21st 2020, 7:39 PM

    @David Walters: What slots?

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    Mute Spbeak
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    Jun 21st 2020, 2:13 PM

    I’m sick of the hypocrisy of some businesses – first the banks – now the airlines, also big manufacturers in other markets – ‘we are too big to fail’, ‘systemic’ etc. – where is the free hand of the market balancing here. When demand picks up new businesses can start up. If a business is unprofitable it should fail. When things are going well these businesses do not want interference from government – competition regulation etc. – i.e. ‘it is capitalism, free market etc.’ – you also have OPEC price fixing on a global level. Either we allow the markets to work and balance things out or else we may as well have the government manipulating all industry and commerce for the good of the Irish people, a mix of both cannot work.

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    Mute Trevor
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    Jun 21st 2020, 9:18 AM

    Stobart aer Lingus regional planes that’s the only reason they have 13% of numbers

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    Mute JJandtim Dwyer
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    Jun 21st 2020, 6:19 PM

    I am sure Eddie Stobart will not will not go without his porridge, his fleet of trucks and trains were up to their necks in business during the pandemic,his little regional air business is a drop in the ocean and can do without my taxes lining his pockets.

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    Mute Lando Griffen
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    Jun 22nd 2020, 6:55 AM

    CityJet are making ALL of their Irish based crew redundant …. some who have served up to 20 years in the company, in favour of keeping cheaper Scandinavian based crew. And now Mr Byrne wants help from the Irish government?? Go and jump pat. Maybe ask Denmark for a bailout since you are now only 100% employing their people in your “Irish” airline.

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    Mute Bran Brans
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    Jun 22nd 2020, 8:16 AM

    @Lando Griffen: But what does their ACMI/franchise agreement with SAS state? Im assuming they would require Scandavian cabin crew at a minimum? For pilots, I guess it doesn’t matter as not customer facing. But if their operations are all centered around CPH and ARN, it wouldn’t make sense to be positioning crew back and fourth to DUB. I don’t really know anything about CityJet so I could be talking complete nonsense, but, seems logical.

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    Mute Lando Griffen
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    Jun 22nd 2020, 10:40 AM

    @Bran Brans: SAS requirement is 1 local speaker in the cabin. The pilots and 2nd cabin member could easily be of any nationality. Remember for the last 2 years, all the Dublin based crew have been operating in Scandinavia without an issue.
    Also worth noting that in the past for the Air France contract …. the company paid for the crew to learn french.
    Pat Byrne is looking for a government handout based on saving Irish jobs and this is a complete lie as they are all expecting their formal redundancy notice today.

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    Mute Bran Brans
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    Jun 22nd 2020, 12:26 PM

    @Lando Griffen: Thanks for clarifying. What about the HQ element (office, ops, engineering etc.)? I suppose those jobs (to an extent) would be protected with a bailout? Btw, to be clear, I’m no proponent of CityJet, just trying to get a better understanding. Cheers.

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    Mute Lando Griffen
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    Jun 22nd 2020, 3:40 PM

    @Bran Brans: me neither but I have friends there and they are being treated disgracefully after many years of loyal service. I have no idea about the engineering staff. I would think the Dublin hangar will be still operational but the “on the ground” stuff will be done by the local Danes. Office is chopping a lot of staff with only minimal required to remain.
    Airlines have and always should work on a LIFO seniority basis. It seems they are all working on the cheapest basis now. Not just these two regionals but also the big players like Aer Lingus and it’s owner BA.
    As Michael said “never miss an opportunity of a good crisis”.

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