Wed, 14 Jan 2026 | ADMINISTRATION
Administrators for Eastern Airways have revealed that they are in talks with a preferred bidder for the domestic airline’s assets, but added that a shortfall to creditors is expected. Jamie Miller and Gareth Harris of RSM UK Restructuring Advisory were appointed as joint administrators of Eastern Airways (UK) Ltd and Air Kilroe Ltd in November 2025.
Founded in 1997, Eastern Airways had most recently flown four aircraft in Europe for KLM-Air France subsidiary KLM Cityhopper, along with a number of UK-based routes under its own brand and its charter business. The airline flew to destinations including London Gatwick, Aberdeen, Humberside, Newquay, Wick and Teesside International.
The company fell into administration a little over three months after KLM cancelled its contract with the airline. The contract included services to the Netherlands, Manchester, Glasgow, Newcastle and Norwich. The company had entered into lease agreements for aircraft and employed 150 additional staff to support these routes.
The contract was cancelled by KLM in July 2025, with the last flights expected to run in October 2025. At the time of its termination, revenue from KLM accounted for approximately 55 per cent of Eastern Airways total revenues.
The company was ultimately unable to secure alternative contracts or revenue streams and, in the absence of immediate cash injections or new contracts, it was determined that it would have to enter administration.
In a report to creditors, the administrators stated that the cancellation of the contract left Eastern Airways with “high fixed overheads and a staff base that was too high to be sustainable.”
They continued: “This, combined with rising costs in the aviation industry, had left the company unable to generate sustainable cashflow and placed them under considerable financial strain."
273 employees were made redundant prior to the appointment of administrators, with 51 retained to ensure fleet maintenance. A further 20 redundancies were made following the company entering administration, leaving 31 staff to support operations.
The administrators received seven offers for Eastern Airways, of which four were deemed competitive. A preferred bidder was subsequently identified, entering into an exclusivity agreement on December 21 2025, with the offer currently progressing.
The creditors report has estimated a shortfall to secured creditor Santander, which is owed £6.9 million, while the outcome for preferential claims from employees (owed £388,000) and HMRC (owed £1.56 million) is uncertain. Unsecured creditors are owed a total of £20.2 million, but no dividend is expected.
In the year ending March 31 2025, Eastern Airways reported revenues of £51.3 million, before posting turnover of £36.2 million and a pre-tax loss of £1.84 million in the period ending October 31 2025.
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