Oil downturn widens losses for Eastern Airways

Eastern Airways news
Eastern Airways news

Losses widened at Eastern Airways as the impact of oil downturn and Brexit hurt the regional airline.

Accounts lodged at Companies House show Eastern Airways (UK) – part of US aviation giant Bristow – made pre-tax losses of £6.8 million during the year to March 31 2018.

This was compared with losses of £3.5m in 2016-17, although turnover grew more than 13% to £61.6m in the latest period.

Business passengers flying into Aberdeen are an important source of revenue for Hunberside Airport-based Eastern.

In his review of the 2017-18, Eastern chief executive Richard Lake said: “The impact of cost reductions implemented by the oil and gas sector … has resulted in reduced passengers.

“We are expecting to see some improvements in passenger volumes in 2019.”

Mr Lake said “significant fluctuations” in the value of the pound after the Brexit vote also hit the company’s financial performance.

He added: “A large proportion of aircraft parts, leasing, fuel and other costs are prices in US dollars, and this is only partly mitigated by revenues.

A new franchise deal with Flybe on some Scottish routes boosted turnover and also “brand presence” with the regional aviation industry, Mr Lake said.

Eastern’s strategy of phasing out older aircraft in its fleet is helping to reduce costs in the current trading year, he added.

Eastern is one of the largest carriers operating out of Aberdeen. Bristow took over the business in a multimillion-pound deal in February 2014.