A major European aviation company that has just signed a pivotal deal with Teesside Airport has collapsed into administration.
European Cargo said it was a victim of rising fuel costs and reduced flying activity, and had appointed Stuart Morris, Robert Fishman, and David Soden of Teneo Financial Advisory Limited as joint administrators.
It was only a few weeks ago that the company announced a deal to open links to China for Teesside International, carrying around 70 tonnes of e-commerce goods destined for UK consumers – including big names like TikTok, Shein and Amazon.
COO Iain Edwards told BUSINESSiQ: "We looked at the Heathrows and the Gatwicks and everything but they get so congested.
"Somewhere like Teesside the aircraft can land, be straight in and on its way within hours – and that’s a massive difference.
"No slot delays.
"Jobs is a big motivator for us all.
"If we expand and we put more aircraft, you’ve got all the people just to even unload the aircraft – but then if you look at expanding into hangars, the amount of people that brings in from a maintenance side of things, it’s massive.
"Even for the airport alone, we’ve taken on 50 new members of staff just for this operation."
But now a spokesperson for Teneo said: "Our appointment follows a period of significant financial pressure on the business, driven by reduced flying activity and working capital and fuel cost pressures.
"Following their appointment, the joint administrators have been assessing the company’s position and available options.
"The company has ceased trading and, regrettably, redundancies are being made."
It is understood there is no impact on Teesside International Airport employees as a result of the announcement, but a spokesperson for the airport said: "Teesside Airport remains well placed as a key logistics, cargo and commercial aviation hub, with strong infrastructure, strategic connectivity and a clear long-term growth plan.
"We remain committed to supporting the aviation freight sector and are in active talks with other global operators.
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"We will continue to work with existing and prospective partners to maximise commercial opportunities for the airport and the wider region and this does not affect our plans for the airport."
European Cargo’s collapse marks a significant downturn for a business that had expanded rapidly in recent years, after its parent company responded to an urgent government request during the Covid-19 pandemic to transport personal protective equipment from Malaysia.
Launching operations in April 2020, the company carried out more than 400 flights delivering PPE and test kits and invested heavily in converting its fleet into dedicated freighter aircraft.
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