A UK airline has lost its last chance at a rescue deal – more than eight months after entering administration.
The firm had suffered financial difficulties after the loss of a contract with KLM.
A potential rescue deal for Eastern Airlines, and its affiliated company Air Kilroe, has fallen through – leaving administrators unable to save the regional airline.
As a result, administrators RSM UK, are set to break up and sell the businesses’ assets separately, as revealed in new documents filed by the company.
A joint sale of Eastern and Air Kilroe was initially pursued as the companies had operated under a single business – before entering into administration in November last year.
The North Lincolnshire-based airline had flown routes across the UK, Ireland and Europe, and had been operating four aircraft for KLM Cityhopper in Europe.
However, the abrupt loss of this contract in October last year plunged the company into severe financial difficulties.
At the time of collapse, RSM said “high fixed overheads” and its staff base had “ultimately proved too high to be sustainable”.
Jamie Miller, partner at RSM UK and joint administrator, added: “The unexpected and sudden termination of Eastern’s KLM contract, along with other economic factors, unfortunately left the directors with no choice but to appoint administrators.“
Now, all nine of the company’s aircraft fleet have been sold off to private buyers, as well as associated plane parts and components.
At its peak, the airliner provided 200 flights per day and employed around 330 staff members, the majority of which have now been made redundant.
Now just 16 employees remain, and are expected to stay on until the administration process is completed.
Known as one of the UK’s last regional airlines, the firm had run a weekday service between Wick John O’Groats Airport and Aberdeen, which was seen as an essential link for those living in the most northerly point on mainland UK.
Launched in 1997, the airliner also flew from bases in East Midlands, Jersey, Manchester, Southampton and Denmark – and even held eight summer slots at London Gatwick.
RSM has declined to comment.