Cost of developing Flybe routes pushes Stobart Aviation to loss

Costs of £18.1 million ($23.3 million) incurred in developing routes under a Flybe franchise deal drove Stobart Group's aviation division to a £2.7 million EBITDA loss in the six months ended 31 August.This compares with a £3.6 million profit in the same period of 2017.If the Flybe-related effects are stripped out, underlying aviation EBITDA was up 15% to £15.7 million. Total aviation revenue rose 16% at £103 million.In May 2017, Stobart Air began operating for UK regional carrier Flybe from London Southend airport, which is owned by Stobart Group. However, the franchise operation is "being withdrawn following the agreements with EasyJet and Ryanair to expand their operations at [Southend], notes the group, which earlier this year had a takeover offer rejected by Flybe.Of its expenditure on development of the Flybe routes, Stobart observes: Demonstrating route viability and building customer awareness was central to securing a milestone agreement with Ryanair that will allow us to accelerate the growth of the airport.