There is a potential lifeline for a portion of the failed regional carrier Eastern Airways, after administrators selected a preferred bidder for its sister company, new documents reveal.
The Collapse of a Regional Operator
Administrators from RSM UK took control of the Humberside Airport-based airline in October 2025, grounding all flights. This led to the immediate redundancy of more than 270 workers. The company's downfall was triggered by the abrupt termination of its crucial contract with KLM, which had accounted for 55% of its revenue.
The KLM Cityhopper deal, signed in March 2024, had led to significant expansion. Eastern Airways leased additional aircraft and hired around 150 extra staff to service routes to the Netherlands and UK cities like Manchester and Newcastle. However, KLM ended the agreement "at very short notice" in July 2025, leaving the airline with unsustainable fixed costs.
A Glimmer of Hope for Air Kilroe
The Eastern Airways group consisted of two main entities: Eastern Airways (UK) Limited (EAUK) and Air Kilroe Limited. The newly filed administrator reports show that a sales process for Air Kilroe attracted ten expressions of interest by a December deadline.
These were whittled down to four serious proposals. After evaluation by RSM UK and the group's secured creditor, Gordon Brothers, a preferred bidder was identified. An exclusivity agreement was signed on 21 December 2025.
The report states the joint administrators are "currently progressing with the offer." The proposed deal structure is agreed at a high level but awaits finalisation, including the position regarding EAUK employees.
Debts, Creditors, and Ongoing Operations
The company's total estimated debts stand at a staggering £34.8 million. A lengthy creditor list for EAUK includes airports across the UK and Europe. Its largest creditor is its sister company, Air Kilroe, which owns the aircraft and vital Civil Aviation Authority (CAA) licenses, owed approximately £21 million.
Significantly, Air Kilroe's air operator certificate has only been suspended by the CAA, not cancelled. This means a buyer could potentially rescue it as a going concern, allowing it to continue operating as an airline. The company may also pursue a Creditor's Voluntary Arrangement (CVA) to settle debts over time.
At the point of administration, 273 staff were made redundant, while 51 were retained to maintain the aircraft fleet. A further 20 have since lost their jobs.
Beyond the KLM work, Eastern Airways operated a seven-year contract supporting BP Oils with flights between Aberdeen and Sumburgh. It also ran Public Service Obligation routes in Scotland and between Newquay and London until 2024, and provided charter flights for Premier League football clubs and Formula One teams.
