DUBLIN, IRELANDIrish regional airline operator Stobart Air has ceased its operations following the collapse of a proposed purchase of the airline by the Isle of Man based company, Ettyl Ltd.

Stobart Air operates regional flights across the UK from Belfast City airport for the Irish flag carrier Aer Lingus under the franchise, which have been canceled as of June 12.

“It is with great regret and sadness that Stobart Air can confirm that the board is in the process of appointing a liquidator to the business and the airline is to cease operations with immediate effect,” the airline says in a statement.

“This unavoidable and difficult decision means that all Aer Lingus Regional routes, currently operated by Stobart Air under its franchise agreement with Aer Lingus, have been canceled.”

Stobart Air owner Esken Group - formerly known as Stobart Group before a name change in February - reached an agreement to sell the carrier to an Isle of Man-based investor, Ettyl. But at the end of May Esken said it had become aware that Ettyl’s proposed financing for the transaction was no longer available and that Ettyl was in discussions over another potential source of financing.

Stobart Air confirms in its statement today that “it has emerged that the funding to support this transaction is no longer in place and the new owner is now unable to conclude the transaction”.

It adds: “Given the continued impact of the pandemic which has virtually halted air travel since March 2020 and in the absence of any alternative purchasers or sources of funding, the board of Stobart Air must take the necessary, unavoidable, and difficult decision to seek to appoint a liquidator.”

Stobart Air was operating Aer Lingus regional flights from Belfast to Birmingham, East Midlands, Edinburgh Exeter, Leeds, and Manchester, together with the Dublin connections to Donegal and Kerry. It employs 480 staff.

Aer Lingus says it was notified by Stobart Air late on 11 June that it was terminating the franchise agreement with immediate effect and that all regional flights operated by the carrier for it have been canceled.

The long-term franchise agreement with Stobart was due to run until the end of 2022, though Aer Lingus had already selected a new partner, widely reported to be Irish start-up Emerald Airlines, to take over these flights from the start of 2023.

Stobart Air was operating nine ATR 72-600 turboprops and a single ATR 42-600, and had two further ATR 72s in storage. The aircraft are all leased.

The airline, which was formerly known as Aer Arann, before rebranding as Stobart Air in 2014, has been on the hunt for new owners since Stobart Group, now Esken, in April last year agreed to buy back the carrier from with the administrators of Connect Airways in a deal aimed at managing outstanding financial commitments. That came a little more than a year after it had sold the carrier to the Connect Airways consortium as part of the latter’s takeover over Flybe, which itself collapsed in March 2020.