A preferred bidder has come forward to potentially rescue part of the business
More than 270 Eastern Airways workers were made redundant last October.(Image: Eastern Airways)
A portion of Eastern Airways could be salvaged after administrators secured a deal with a preferred purchaser, according to newly released documents.
More than 270 workers were made redundant last October when administrators took control of the Humberside Airport-based carrier, just days after all flights were grounded.
The UK short-haul operator found itself in dire straits when its crucial KLM contract – under which Eastern operated four aircraft for KLM Cityhopper – was terminated “at very short notice”, saddling it with enormous fixed overheads. This included an untenable workforce, resulting in more than 290 redundancies since RSM UK stepped in as administrators.
The company comprises two entities – Eastern Airways (UK) Limited (EAUK) and Air Kilroe Limited – and administrators have now lodged reports for both, detailing the sequence of events that led to the group’s collapse, alongside developments regarding a prospective purchaser. The filings offer a ray of hope, revealing that a preferred bid has been selected for Air Kilroe.
The documents also indicate Air Kilroe may pursue a CVA (creditor’s voluntary arrangement), whereby it would reach an understanding with creditors to settle a proportion of outstanding debts over an agreed timeframe. Following the launch of a sales process, 10 expressions of interest were received by December’s deadline, which were subsequently narrowed down to four serious proposals evaluated by RSM UK administrators and the group’s secured creditor, Gordon Brothers.
The report states: “Following numerous discussions with all the interested parties and an assessment of the offers as a whole, the joint administrators identified a preferred bidder and an exclusivity agreement was entered into on 21 December 2025. The joint administrators are currently progressing with the offer from the preferred bidder. The proposed high level structure of the deal is agreed, but will be finalised in due course, including the position in relation to the employees of EAUK,” reports Hull Live.
An interested party, such as the bidder, could potentially “rescue Air Kilroe as a going concern in order to keep operating as an airline” given that the company could remain solvent and retain its air operator’s certificate, which has only been suspended by the UK Civil Aviation Authority, not fully cancelled. This development could provide a glimmer of hope for the hundreds of employees who were initially made redundant.
After the directors filed a notice of their intention to appoint administrators, 273 employees were made redundant, while 51 were kept on “to ensure maintenance of the aircraft fleet as the company sought to rescue some or all of the company’s operations as well as remaining compliant with the relevant Civil Aviation Authority regulations”. Since then, an additional 20 have been made redundant.
Meanwhile, the company’s estimated debts have been calculated at £34.8m. A comprehensive 16-page list of creditors for Eastern Airways UK Limited includes airports across the UK and Europe.
Its largest creditor is its sister company, Air Kilroe, which owns the aircraft and CAA licenses, with a debt of around £21m, as all financial transactions were handled by Eastern Airways Ltd since Air Kilroe did not operate a bank account.
The report also reveals that the airline was one year into a seven-year contract providing support to BP Oils, facilitating flights between Aberdeen and Sumburgh using its own fleet. The company also ran Public Service Obligation services in Scotland, as well as between Newquay and London from 2021 to 2024.
It had submitted a bid to continue the southern service from November last year but withdrew after entering administration.
Eastern Airways also successfully operated charter flights for corporate clients, including Premier League Football Clubs, Formula One Teams, and private companies. However, it was the KLM deal that contributed to 55% of its revenue and spurred job creation.
The report further stated: “The company had historically been profitable and had ambitions for growth. This included the signing of a contract with KLM City Hopper in March 2024 to provide services to the Netherlands, with additional flying to Manchester, Glasgow, Newcastle and Norwich. In order to service the KLM contract, the company had to expand their fleet of aircraft which was achieved by entering into lease agreements for aircraft as well as employing an additional circa 150 staff employed. In July 2025, KLM terminated the contract at very short notice with the last flights expected to be operated in October 2025.”
