On Friday morning, FlyBe and Connect Airways announced in a press release an agreement on the terms of a recommended cash offer for Flybe. Connect Airways is a joint venture of Virgin Atlantic Limited, Stobart Group, and Cyrus Capital.

FlyBe is one of biggest airlines in the United Kingdom and has hubs at Birmingham and Manchester. Flybe serves 80 destinations in 15 countries around Europe. Most destinations are located in the UK or France. FlyBe’s fleet currently includes 54 Bombardier Dash-8 Q400s, 11 Embraer E175s, and 7 Embraer E195 aircraft.

FlyBe faces daunting financial problems. In November 2018, FlyBe put itself up for sale and earlier and announced profit warnings. In November, Connect Airways considered a takeover. With the investments in the group, Flybe can continue to operate across Europe. FlyBe will eventually be rebranded to Virgin Atlantic.

Virgin Atlantic says that Connect Airways will offer significant benefits for customers. It will:

  • Deliver more choices to customers by linking UK regions and Ireland to Virgin Atlantic’s long-haul network through improved connectivity at Manchester Airport and London Heathrow
  • Provide a strong foundation to secure the long-term future of Flybe and its customers by leveraging the combined commercial, operational, and functional expertise and scale of Virgin Atlantic and Stobart Group
  • Utilize the strength of the Virgin Atlantic brand and the offer of an enhanced customer experience in keeping with Virgin Atlantic’s heritage
  • Provide the Combined Group with an increased presence at Manchester Airport, London Heathrow Airport, with the potential to grow further in London Southend Airport

“Flybe plays a vital role in the UK’s transport infrastructure with a UK regional network which uniquely positions it to benefit from growing demands from long haul carriers for passenger feeder traffic. We have successfully implemented a clear strategy in recent years focused on tighter fleet management, improving revenue per seat and increasing load factors. The pursuit of operational excellence has reduced maintenance times and increased efficiencies and customer satisfaction,” said Christine Ourmieres-Widener, CEO of FlyBe

“However, the industry is suffering from higher fuel costs, currency fluctuations and significant uncertainties presented by Brexit. We have been affected by all of these factors which has put pressure on short-term financial performance. At the same time, Flybe suffered from a number of legacy issues that are being addressed but are still adversely affecting cashflows,” Widener continued.

“By combining to form a larger, stronger, group, we will be better placed to withstand these pressures. We aim to provide an even better service to our customers and secure the future for our people.”

Featured image by Alexander Stahl/Aeronautics Online

Categories: Industry Talk