Reports suggest that a buyer may have been found for troubled UK-based freighter operator European Cargo, which entered administration earlier this year.
Sky News yesterday reported that the airline’s former owner, European Aviation, is on the verge of stepping in to rescue the company.
A deal could be announced as early as Thursday, the report stated.
European Aviation, which is owned by ex-Formula One team leader Paul Stoddart, sold 49% of his stake in European Cargo in 2022 and the remaining 51% stake two years later. Priority 1 Logistics then became the 100% owner of the airline.
The airline emerged in April 2020 during the onset of the Covid-19 pandemic, after European Aviation sought to offer the UK government capacity to transport medical equipment from Malaysia.
It had been acquiring Airbus four-engined A340-600 passenger jets from carriers such as Virgin Atlantic and initially operated them as temporary freighters.
European Cargo subsequently obtained approval to operate the -600s in a permanent cargo configuration, with a 76t payload capability, and has been gradually converting its fleet.
The airline had been operating the aircraft between China and Bournemouth and Teesside in the UK, largely carrying e-commerce shipments.
No cargo door is added during the conversion process, allowing the aircraft to potentially be turned back into passenger aircraft in the future, but making the cargo loading process more complicated than on a fully converted freighter.
The company began to run into trouble when its largest customer asked for a 30% reduction in service price due to softer volumes.
In addition, the wars in Ukraine and in the Middle East resulted in increasing jet fuel prices that negatively impacted the business through reduced profit margin per flight.
The airline entered administration in June of this year, with 174 of its 219 staff made redundant.
In terms of aircraft, the administrator’s sales process has invited offers for six A340-600P2F aircraft owned by sister company Priority 1 (P1) and currently maintained in flight-ready storage; a further three A340-500 and six A340-600 owned by P1, currently in long-term storage; and one A340-600 designated for spares and a “substantial” engine inventory.
The sale process also involves spare parts and other assets owned by the company; the company’s UK Air Operator’s Certificate, Part 145 Maintenance Approval and Continuing Airworthiness Management Organisation approval, as well as ownership of the Company.
European Cargo’s most recent financial statement shows it made a full-year net loss of $26m in 2024 — on revenues of $136m — a slight improvement on its net loss of $30.6m in 2023.
Air Cargo News has contacted the administrator for more details.
