Cornwall Airport loses £1.5 million after airline goes bust

It's unlikely to get cash out of Eastern Airlines

Newquay airport is owed more than £1.5m by failed airline Eastern Airways, but is unlikely to see any of the money.

The airline went into administration last November forcing all flights from Cornwall to London to cease until a replacement could be found.

An agreement was made with the government and Cornwall Council in late 2021 that Eastern Airways would operate daily services between Cornwall Airport Newquay and London Gatwick. The service was operating under a four-year Public Service Obligation (PSO), which ensures the route is maintained year-round and Cornwall remains connected to a major airport hub which is seen as vital for our economy.

Under the PSO, Cornwall Council and the Department for Transport provide financial support to ensure the service is maintained. The PSO route is now run by Skybus, the Isles of Scilly Steamship Group’s airline.

A notice of administrator’s proposals has now been published on Companies House showing that Eastern Airlines owes £28,710,452.33 to 416 creditors, including a number of businesses in the South West.

Cornwall Airport Newquay is owed one of the largest amounts – £1,566,910.62. However, there is very little hope that any of that money will be paid.

The report by administrators RSM UK Restructuring Advisory LLP states there is ‘nil’ prospect of unsecured creditors – who account for over £20m of the debt – recovering their money.

Other local companies listed as creditors include MRMU (HIE) Ltd T/A Holiday Inn Express, Victoria, St Austell (£18,176.44), A2B Taxis (Truro) Ltd (£9,646.23), Helios Maritime Aviation, Cusgarne, Truro (£4,165.88) and In Safe Hands Training Ltd, Indian Queens Trading Estate (£118.80).

Exeter Aerospace Limited is owed £204,253.26 and Exeter and Devon Airport Ltd £9,863.27. Plymouth-based Courierforce is also listed as being owed £51,231.60.

We have approached Cornwall Council and Cornwall Airport Newquay for comment.