The owner of Southend airport and Stobart Air slipped into the red in the first half of the year.
Stobart Group’s aviation division was “severely impacted” by Covid-19 in the six months to August 30.
Passenger flights resumed from June 2020 but rolling quarantine arrangements led passenger numbers to fall by 89.5% to 124,500 passengers, with revenues down 48.9% to £13.5 million.
The company is “carefully managing the cash burn through the winter period and the second national lockdown and is confident in its partnerships with its existing carriers”.
Positive discussions are being held over the post-winter schedule which starts in April 2021.
Divisional losses were trimmed to £900,000 from £1.7 million in the same period last year.
However, the group reported an overall loss of £4.9 million against a £2.5 million profit a year earlier.
The group said it “remained focused” on the disposal of Sobart Air, which operates Aer Lingus Regional flights.
The trading outlook for Stobart Air has “deteriorated significantly” due to continued quarantine arrangements in Ireland, with limited flights operating.
Stobart Group planned for a “potential no-fly scenario” for the regional carrier through the winter at the time of a fund raising exercise in June.
It has “consequently taken appropriate action to manage its cost base and minimise cash burn”.
The group said it is seeking to exit the business “in early course”.
Stobart said: “To that end, it is engaging actively with parties interested in acquiring its stake and with Aer Lingus to enter a new commercial arrangement beyond December 2022 as part of this process.”
Group chief executive Warwick Brady said that Covid-19 has created “unprecedented challenges” for the aviation and energy infrastructure company
“In response, we have taken decisive action to bolster liquidity, reduce cash burn and protect our long-term strategic objectives. These actions should allow us to emerge from this crisis in the best possible position to deliver our focused strategy,” he added.
“Whilst passenger travel has been severely disrupted by lockdowns and evolving quarantine arrangements, London Southend airport has benefited from uninterrupted income from its global logistics operation.
“Looking forward, the group has immediate access to liquidity, with £119.1 million in cash and undrawn banking facilities.
“Our focus remains on what we can control, namely managing our operations well, optimising both cost and cash management and rationalising the portfolio to maximise value.
“We continue to believe our future strategy and the medium-term move to a pure play airport and aviation services business will deliver superior shareholder returns.”