PLANESTATION, the owner of Kent International Airport and EUJet, needs £22m to develop the budget airline and the rest of its business.

Shares fell steeply after the company announced six-month losses of £6.5m and confirmed it was not making enough money at Manston and its other airports to cover operating costs.

PlaneStation, which is moving its headquarters from London to Manston, is looking for a cash injection from shareholders to help fund its operations, particularly the airline business.

PlaneStation is currently using proceeds from property sales to fund working capital requirements. Shares fell from 22.5p before the announcement on December 2 to less than 17p on December 3.

Bosses have been reviewing EUJet’s business plan and found that the airline needs more cash.

PlaneStation chairman John Mackay said: “The review of the business plan has now been completed and the directors are of the opinion that the Group will require a working capital injection of not less than £22m to fund both the development of EUJet and for the Group to achieve its long term strategy.”

Mr Mackay said initial meetings about a refinancing plan had been positive and a number of major shareholders had indicated their support. But he warned success of the financing was not guaranteed.

He added: “The last six months have been particularly challenging and I expect this to be the case for the foreseeable future.”

Martin May, chief executive, who was recently given the Turnaround Professional award by the Society of Turnaround Professionals for his work with Cape, PlaneStation and McNicholas, said the board was committed to creating long-term value for shareholders.

A refinancing deal in January had reduced finance costs by 44 per cent and the company had invested £6m in its airports, including KIA. PlaneStation had also injected £2m to acquire a 30 per cent stake in EUJet and has an option to buy the remaining 70 per cent.

Mr May said: "I believe that these actions together with the continued support of shareholders will unlock significant value from our portfolio of core airports."

Meanwhile, PlaneStation announced that 71,000 passengers had flown with EUJet in the first 13 weeks of operation, with total bookings standing at 151,000.

Manston also handled 14,900 tonnes of cargo, down 33 per cent on the same period in the previous year.

The reduction was due to the withdrawal of a major customer MK Airlines which switched operations to Ostend, Belgium, after refusing to pay higher charges.