Astraeus Airlines has spoken of the sympathy it has with Bath Travel-owned Palmair after it was forced to repossess the Boeing 737 it leased to the Bournemouth operator.
Travel Weekly reported in October that the operator had given up its only aircraft to safeguard the future of the business.
In a statement, Astraeus said the contract was not due to expire until April 2012, but it had been forced to confiscate the aircraft due to the level of debt owed by the Bath Travel-owned operator.
An Astraeus spokesman said: “Efforts were made to negotiate a return of the aircraft, but these were not concluded and unfortunately, R E Bath Travel Services (Palmair) Limited was unable to honour its contractual obligations.
“Given the scale of the debt, plus the length of contract which will not now be honoured by R E Bath Travel Services (Palmair) Limited – the contract was due to run until April 2012 – we have reluctantly resorted to taking this action.”
He added: “Despite the difficulties being experienced by R E Bath Travel Services (Palmair) Limited, for which we have great sympathy, we remain hopeful that R E Bath Travel Services (Palmair) Limited or Bath Travel (its associate company) is in a position to settle the issue.”
Bath Travel joint managing director Stephen Bath said the operator had paid up until October when the lease was terminated.
He told travelweekly.co.uk: “We had planned since February 2010 that we would give up the aircraft on October 31 2010 and this was agreed (with the airline). Palmair will continue to operate with a small number of seats on Thomson Airways throughout February, March and April.
“We have decided to finish at the end of April because of the economy and in great part because of competition from other airlines. Ryanair has swamped Bournemouth airport and made it impossible to continue. We thought we’d bring it to a dignified end without upsetting anyone’s travel plans.”