ESKN.L Regulatory News (ESKN)

This announcement contains inside information for the purposes of article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018.

9 August 2021

Esken Limited

("Esken" or the "Group")

Update of Ryanair closure of London Southend Airport Base

Esken today provides an update following the announcement that Ryanair had decided to close its base at London Southend Airport ( 'LSA') with effect from 1 November 2021.

David Shearer, Executive Chairman of Esken commented,

"The terms of the deal which had been entered into with Ryanair in 2018 were based on a significantly different set of market and economic parameters to the present day. We are therefore commercially agnostic to this decision and will look to build sustainable and profitable passenger growth for LSA with a range of other carriers as demand recovers into a post pandemic world."

"LSA has a catchment area of c8 million people resident within one hour travelling time from the airport, a regular direct train connection to London Liverpool Street station, a cost efficient base of operation for airlines and an enhanced safe passenger experience for post COVID-19 travel. The fundamental commercial rationale for LSA remains strong and our partnership announced recently with Carlyle will allow us to capitalise on that opportunity as passenger demand recovers."

Ryanair currently has two based planes operating out of LSA but schedules, load factors and yields have been affected significantly by the uncertain market in aviation resulting from the COVID-19 pandemic. Following a review of its network Ryanair has decided to redeploy these aircraft to its other bases to improve its own overall network efficiency with effect from the start of the winter flying season.

The impact on both EBITDA and cash headroom in FY22 will be negligible in view of the expectation of limited flying in the winter season. In relation to FY23 management have time to implement mitigating actions which will include cost savings and deferral of discretionary capital expenditure and attracting new carriers into LSA to operate the routes vacated by Ryanair. The impact on EBITDA and cash headroom in FY23 if no such actions were taken is expected to be around £1.4 million against the Reasonable Worst Case Scenario as set out in Prospectus and Circular issued on 28 July 2021. The ring fenced funding facility for the airport has adequate headroom to cover any such potential impact.

Esken remains focussed on targeting airlines for the recovery of flying in summer 22 when demand is expected to show a recovery post COVID-19. The Group is in active dialogue with a range of Low Cost and Flagship Carriers where the previously proven route profitability, the airport's efficient operating cost base and the safe passenger experience is likely to prove attractive as demand recovers.

The announcement by Ryanair does not have any impact on the investment into LSA announced with Carlyle Global Infrastructure Fund ( 'Carlyle') or the new banking facilities referred to in the Prospectus and Circular.

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