Eastern Airways collapses into administration following termination of key KLM contract

UK regional carrier Eastern Airways and associated entity Air Kilroe have entered administration, marking the latest setback for the country’s embattled domestic aviation sector. Jamie Miller and Gareth Harris of RSM UK Restructuring Advisory were appointed joint administrators on 4 November, following the airline’s filing of a notice of intention to appoint administrators on 27 October.

Headquartered at Humberside Airport, Eastern Airways operated a network of regional and charter services across the UK and Europe, including government-supported routes serving remote communities in northern Scotland. The company also maintained operations in the North Sea offshore oil and gas sector, connecting regional hubs such as Aberdeen, Teesside, and Humberside.

The airline’s collapse followed the loss of a major contract to operate four aircraft for KLM Cityhopper, the regional arm of Dutch flag carrier KLM. The termination of that agreement left Eastern with an unsustainable cost structure, including a large staff base and high fixed overheads. The administrators said the company had been unable to right-size its operations quickly enough to offset the loss of revenue from the KLM arrangement.

Most of Eastern’s approximately 330 employees were made redundant in the week leading up to the administration filing, with a small number retained to assist with fleet maintenance and the administration process. RSM confirmed that the remaining staff are supporting efforts to secure a going-concern sale of part or all of the airline’s operations and assets.

Founded in 1997, Eastern Airways was one of the UK’s few remaining independent regional carriers. It had weathered significant turbulence since the pandemic, when falling passenger volumes and rising operating costs eroded profitability. The airline had recently focused on rebuilding its scheduled network and regional partnerships, but continued to face pressure from higher fuel costs and competition from low-cost operators.

The Civil Aviation Authority has advised passengers not to travel to airports and to seek refunds or alternative arrangements, as all scheduled Eastern Airways services have been suspended. The administrators have invited expressions of interest from potential acquirers or investors in the fleet and related assets.