Southend Airport faces uncertain future after urgent demands to repay £200m loan

Southend Airport.
Southend Airport Credit: ITV News Anglia

Southend Airport is facing an uncertain future after bosses said a row over finances between its owner and their biggest investor could lead to grounded flights.

US private equity firm, Carlyle, has demanded urgent repayments of a near £200-million loan - something which owners, Esken, say could lead to services being suspended.

According to Esken chair, David Shearer, the loan had been set to mature in August 2028.

He told The Standard that if Carlyle pushes ahead with its plans to force through the repayment of the £194 million, operations at the airport would likely be suspended.

Carlyle has accused Esken of flouting the terms of the debt deal, which was agreed in 2021, with breaches stretching back as far as November 2022.

Esken denies this and has filed a defence in court in a legal battle over the loan agreement.

Esken has been seeking a buyer for Southend Airport since June last year after it warned about the stability of its finances.

In 2022 the firm arranged a £50 million borrowing facility to keep its finances in check.

But last year, Carlyle began legal proceedings against Esken over the alleged loan breaches.

A spokesperson at Carlyle said: "Following repeated and continuing defaults under our loan agreement since 2022, Carlyle can no longer wait patiently, putting the position of its investors and the ongoing success of London Southend Airport at risk.

"Esken is financially distressed and is not in a position to support the airport’s full recovery and growth nor execute an orderly sale of the airport.

"We have made numerous proposals to Esken and the airport to secure the airport’s long-term future, and look forward to stable ownership of the airport by an experienced and financially strong entity."

In a statement, a spokesperson for Esken said: "Esken and LSA are disappointed that CGI has chosen to take this action and are open to engaging with CGI to resolve the issue. Esken remains committed to financially supporting LSA’s positive recovery, and most importantly, the day-to-day operations of the airport are unaffected.  

"Passengers can continue to benefit from our award-winning airport experience. We are delighted to be operating our largest winter schedule in four years and we have routes to Italy, Spain, Portugal and France amongst others for the summer."

Southend Airport was bought by Esken, formerly known as Stobart Group, in 2008 for £21 million.

Since 2020, a string of airlines have pulled operations, including easyJet, Ryanair and Wizzair, after the airport was shut during the height of the coronavirus pandemic.

Of those three, so far only easyJet has returned, along with a new deal with Aeroitalia, with the two operators offering a range of European destinations including Paris, Milan and Malaga.

Esken, which also owned a renewables business that it sold in December, last year said airport revenues rose 8.7 per cent to £25.5 million for the year to the end of February, while pre-tax losses narrowed slightly, from £35.7 million to £27.7 million.

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