Stobart Air is a unit of London stockmarket-listed freight firm Stobart Group.
Stobart Group confirmed that talks over a potential collaboration and a possible ownership deal with CityJet were at an end.
It had long been speculated that CityJet and Stobart Air were eyeing some sort of tie-up but “informed by our wider review, the board has concluded that the agreement with CityJet is not in the commercial interest of the group”, Stobart said.
A spokesman for CityJet said it had ended the acquisition talks because of the protracted nature of the negotiations.
Stobart again said it was seeking to buy the 33% stake held by Aer Lingus in Stobart Air and Propius, its aircraft leasing firm.
Stobart had said last month it planned to pay €14.7m to Aer Lingus —now owned by IAG — for the stake.
Stobart had previously bought out another stake, a shareholding held by Invesco Asset Management.
The airline was reassuring about the future of its relationship with Aer Lingus.
“Our Aer Lingus Regional services will continue to grow, with a continued emphasis on growing passenger numbers across our 31 routes throughout Ireland, the UK, and France,” it said.
Stobart also said it plans to expand at Southend Airport, which it owns, by adding 18 routes for Flybe.
Shares were up 5% yesterday. They have gained about 60% this year.