Eastern Airways to buy Air Southwest
The privately-owned airline, which is based at Humberside airport and also operates flights from Leeds Bradford airport is buying ASW from Sutton Harbour Holdings.
The deal is expected to take place in October. Sutton Harbour said Air South West had a net carrying value of 3.8m at the end of March.
Volcanic ash disruption and continued difficult trading conditions meant ASW had falled to pre-tax losses of 1.5m in this financial year to date.
ASW, which operates services out of Plymouth and Newquay to 10 UK, Irish and Channel Ireland destinations, made losses of 3.5m in the year ended 31 March. The firm was set up by Sutton Harbour Group and started trading in October 2003.
Sutton Harbour remains the owner and operator of Plymouth City Airport.
Michael Knight, chairman of Sutton Harbour Holdings, said: "This disposal will bring to an end to the group's exposure to airline trading losses which have severely impacted the group's financial results, particularly over the last eighteen months.
"Going forward we will now be able to focus our efforts on the regeneration and commercial property activities."