UK regional carrier Eastern Airways found itself burdened by high fixed costs after Dutch operator KLM terminated a capacity partnership, according to its administrator.
Eastern Airways, based at Humberside airport, suspended operations on 27 October.
RSM UK Restructuring Advisory is expecting to be formally appointed to oversee the carrier, as well as the related company Air Kilroe, with Jamie Miller and Gareth Harris named as joint administrators.
Eastern Airways was founded in 1997 and took over Air Kilroe about two years later.
It developed as an independent operator with activities including scheduled flying – specialising in high-frequency connections – plus wet-lease, public-service obligation routes, and support to the energy sector.
The carrier’s business expanded from turboprops to Embraer regional jets and included operating flights to Amsterdam on behalf of KLM Cityhopper.
RSM UK states that it had been flying four aircraft for Cityhopper, but adds: “Very recently the KLM contract was terminated leaving Eastern with high fixed overheads and a staff base that has ultimately proved too high to be sustainable.”
It says the directors had been seeking alternatives to rescue the companies but faced a “significant immediate funding requirement”.
Ceasing operations was “the only viable option”, it adds.
Proposed joint administrator Jamie Miller says the situation has been “fast-moving” but the directors were ultimately dealing with “circumstances outside their control”. Miller adds that the 330 personnel at the carrier have had to be made redundant.
“Sufficient staff have been retained to provide ongoing service and assistance to Eastern’s valued customers, and to continue maintenance of the aircraft,” Miller says.
“We would welcome any interest from potential alternative operators, or those who may have an interest in the underlying assets.”
