Aer Lingus has cancelled its contract with Cityjet which had been providing flights on Aer Lingus' behalf on a number of routes, including between Dublin and London City Airports.
The move represents another blow for Cityjet as it attempts to restructure its business for the future through an examinership process.
"The impact of Covid-19 on the airline industry, including the closure of London City Airport, and the uncertainty of its duration has regrettably required Aer Lingus to terminate its wetlease agreement with CityJet and cease operations for the foreseeable future on the Dublin London City route," the airline said in a statement.
~
"Impacted guests due to travel with Aer Lingus to/from London City Airport have been contacted directly and advised what options are available to them."
Along with the London City Airport route, Cityjet had also operated flights for Aer Lingus between Dublin and Paris and Dublin and Birmingham through an arrangement known as "wet leasing".
However, Aer Lingus along with all other airlines has seen a dramatic fall off in passenger numbers due to the Covid-19 pandemic crisis.
Last month Kieran Wallace of KPMG was appointed examiner to Cityjet DAC by the High Court.
The company said a full review is now being conducted of the business with a view to restructuring it in such a way that it can be made sustainable for the future.
Last week Cityjet signalled it was commencing a consultation process with unions that could lead to up to 700 redundancies across Europe, including 276 in Ireland and UK.
The first meeting between unions and Cityjet management took place yesterday.
The Fórsa union representing pilots said it had tabled alternative proposals which would enable the airline's Dublin base to remain operation-ready in anticipation of a recovery in demand later in the year.
These included a proposed reduction in salary of up to 50% for pilots, as well as a suspension of all agreements to facilitate cost reductions, and offering "complete flexibility" until a resumption of flight operations.
"Despite the alternative approach we offered, it's become clear that CityJet intends to crew its Irish registered aircraft out of Dublin with employees based in Denmark and possibly other Scandinavian bases," Fórsa official Ian McDonnell said.
"CityJet has a contract with SAS which is held by its Irish parent company CityJet DAC."
"It's extremely disappointing, particularly because Mr Justice Michael Quinn, in granting the examinership, stated the number of people employed in the company was a relevant factor. CityJet's Dublin base has been in operation for 27 years, and many pilots have spent the majority of their aviation career with the airline."
Prior to the crisis, Cityjet employed 1,175 people, more than 400 of whom are based in Dublin where its headquarters is located.
