Estonian state-owned airline Nordica, which operates PSO routes in Sweden, has offered to take on the Kerry to Dublin route left vacant by Stobart Air's collapse, it is understood.
Contact was made with the airport over the weekend and the matter is now with the Department of Transport.
Approaches had been made by Kerry Airport some months ago to several airline companies on the basis that Stobart Air might experience difficulties continuing to operate the Kerry to Dublin route for the remaining seven months of its contract.
Talks with Nordica were already at an advanced stage when news emerged of Stobart’s immediate collapse at the weekend and they are understood to have progressed further since.
Stobart operated the Aer Lingus Regional network, mainly connecting British regional airports with the Republic, under a deal that was due to run until next year.
It also operated Government-funded public service obligation (meaning the route is subsidised by the government) services between Dublin and Kerry and Dublin and Donegal.
Of the 12 routes immediately affected by Stobart Air’s decision to cease trading, Aer Lingus will operate five and, for at least the next week, BA CityFlyer will operate two.
At the moment there are no plans to service the two regional routes from Kerry and Donegal to Dublin.
The Kerry to Dublin connection accounts for a third of passenger numbers for Kerry Airport and is considered vital to the facility’s operation. Other airlines, including Emerald, have also shown interest in the contract.
John Mulhern, chief executive of Kerry Airport, said on Monday he was confident a replacement carrier was ready to step in.
“I am very confident, if the arrangements can be put in place, this may be a lot sooner than expected,” Mr Mulhern said, when asked if another airline could be found to maintain the four flights a day to and from Dublin.
The airport was braced for Stobart pulling out and it is owed less than €400, Mr Mulhern said.
The PSO contract process allows for a replacement carrier to be appointed, without going through the full tender process, should an appointed carrier cease to operate. This could pave the way for another carrier take on the remainder of the current contract relatively swiftly.
There are also contingency plans for dealing with a financial loss to the airport should the vacuum continue for the next seven months when the PSO contract is out to tender again.
Coincidentally, this is the timeframe allowed for a replacement under provisions in the government funded public service obligation contract should a carrier cease to operate.
The subsidised route is considered vital for Kerry tourism and business. It also serves an important role in carrying cancer patients and others for medical treatment in Dublin.
Passenger numbers had been growing prior to the pandemic and more than 58,000 people flew on Dublin Kerry route in 2019.
Numbers were gradually increasing again with flights about half full in recent weeks following a period of reduced passenger demand during the pandemic.
Staffing had also been reduced at the airport with private agreements reached with just under ten staff, he said.
Flights from Kerry to London, Frankfurt Hahn, Faro and Alicante are set to return in July. The four regional PSO flights a day continued to operate throughout the Covid restrictions.
The airport is also trying to grow its private jet business.