Southend Airport owner ‘agnostic’ about Ryanair’s withdrawal
Esken said that the effect on earnings will be negligible.
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Your support makes all the difference.The company behind Southend Airport has said it is “agnostic” about Ryanair pulling out of the site later this year.
Esken said that the impact on its earnings and cash headroom would be “negligible” after Ryanair pulls out on November 1.
With Covid still lingering, it expected “limited flying in the winter season” anyway, Esken said in a statement to shareholders.
However investors met the news, which broke over the weekend, with pessimism.
Shares in the company dipped by more than 5% an hour after markets opened on Monday.
It is just under a year since rival budget airline easyJet also pulled out of Southend airport.
David Shearer, executive chairman of Esken said: “The terms of the deal which had been entered into with Ryanair in 2018 were based on a significantly different set of market and economic parameters to the present day.”
“We are therefore commercially agnostic to this decision and will look to build sustainable and profitable passenger growth for LSA (London Southend Airport) with a range of other carriers as demand recovers into a post pandemic world.”
Esken recently agreed a deal with US private equity company Carlyle which will bring £125 million for the company.
The money will be lent to Esken, but Carlyle can convert the loan into a nearly 30% stake in Southend Airport.
“LSA has a catchment area of circa eight million people resident within one hour travelling time from the airport, a regular direct train connection to London Liverpool Street station, a cost efficient base of operation for airlines and an enhanced safe passenger experience for post Covid-19 travel,” Mr Shearer said.
“The fundamental commercial rationale for LSA remains strong and our partnership announced recently with Carlyle will allow us to capitalise on that opportunity as passenger demand recovers.”