Planestation shares plummet 30% over lack of passenger numbers

SHARES in Planestation plunged 30% yesterday after the owner of Shannon-based airline EUjet said it was struggling to attract enough passengers and would need to sell property assets to ease cashflow problems.

The company, which also owns Kent International Airport in the south-east of England, said it was in the process of selling a 75% interest in a business park next to the airport, but warned that EUjet passenger traffic had failed to meet targets over the past year.

Planestation bought EUjet late last year in a deal that valued the airline at around e6 million. It planned to use EUjet’s low-fares strategy to increase traffic through Kent.

“Whilst EUjet has made considerable progress since its launch of scheduled services from Kent International Airport in September 2004, a previously unknown market, it is now apparent that passenger numbers will fall below planned levels during its first year of operation,” the company told the stock exchange yesterday.

It also said EUjet was suffering from sustained high oil prices, which now teeter around $61 per barrel and are more than 50% higher than a year ago. But it remained defiant about prospects.

EUjet has steadily bumped up its operations from Kent and its route network now includes 22 airports, including Shannon, Dublin and Belfast.

But the market took fright at the firm’s statement that warned of other asset disposals to fund EUjet’s working capital requirements. “As a consequence of the shortfall in passenger numbers, together with the increases in oil prices, the directors recognise the cash requirement within EUjet will be greater than originally planned, which they intend should be funded by further asset disposals,” the company said.

Meanwhile, there was better news for Aer Lingus yesterday as it was voted airline of the year by the Chambers of Commerce of Ireland (CCI). The airline also picked up awards at the CCI’s Air Transport Users Council ceremony for best airline on transatlantic routes and best on routes to Britain (excluding London).

BMI was named No 1 on routes between Ireland and London. Shannon Airport was voted best Irish airport, while Kerry picked up the best regional airport award. Ryanair won the value for money and best online services categories. Air France was voted number one for European routes.