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Malcolm

Flybe rescued by Virgin and Stobart

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Flybe rescued by Virgin and Stobart

Flybe is being bought for £2.2m by a consortium including Virgin Atlantic and Stobart Group.

It will operate under the Virgin Atlantic brand, marking a return by Virgin to domestic flights, following a failed attempt five years ago.

Based in Exeter, Flybe carries around eight million passengers a year from airports such as Southampton, Cardiff and Aberdeen, to the UK and Europe.

The sale comes after Flybe's profits warning in October .

Shareholders in Flybe will receive just 1p a share and the consortium, which also includes venture capital firm Cyrus, will inject £100m.

 

Christine Ourmières-Widener, Flybe's chief executive, said the industry has been suffering from higher fuel costs, currency fluctuations and "significant uncertainties" presented by Brexit.

"We have been affected by all of these factors which have put pressure on short-term financial performance," she said.

flybe share price

To support the on-going operations of the airline, the consortium, known as Connect Airways, will initially lend £20m to Flybe.

A further £80m will be invested in Flybe, which describes itself as Europe's largest regional airline.

Connect Airways will also buy Stobart Group's regional airline and aircraft leasing businessThe group said it would "create a fully-fledged UK network carrier" - an opportunity for Virgin, which currently focuses on long-haul, to expand in the UK.

Image copyright Getty Images Image caption Sir Richard's last attempt to launch a regional UK airline failed

Virgin, founded by Sir Richard Branson, abandoned attempts to run domestic flights in 2014 through its Little Red airline.

Virgin Atlantic is now a joint venture with Delta Airlines.

Warwick Brady, chief executive of Stobart Group, said it would also be an opportunity to get more passengers to fly from Southend airport, which it owns, along with Carlisle airport.

John Strickland, director at JLS Consulting, said: "It's still a difficult part of the airline market to operate in. The regional segment is the hardest, because it is short flights where passengers are price sensitive and there's competition with rail and road."

But getting a big cash injection should help the financial performance of Flybe and maintain routes, he said.

The 1p-a-share offer is well below the 295p at which they were floated in 2010 and the levels around 30p at which they were trading before October's profits warning.

Flybe's rescue comes after the collapse of Monarch Airlines and Primera

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Flybe finalises asset sale to Virgin Atlantic consortium

by Phil Davies Feb 21st 2019, 21:34
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Flybe finalises asset sale to Virgin Atlantic consortium

Struggling Flybe has completed the sale of its assets to a consortium of buyers led by Virgin Atlantic.

The loss-making UK regional airline confirmed it has sold its assets and operations for £2.8 million to Connect Airways, a consortium consisting of Virgin Atlantic, Stobart and hedge fund Cyrus Capital.

The deal comes just days after it emerged a group led by US airline Mesa had tabled a last-minute refinancing proposal that would see it inject £64 million in new equity.

But the Exeter-based airline opted for the Connect Airways offer just hours ahead of Friday’s deadline.

The deal covers the carrier’s two operating subsidiaries – Flybe Limited and Flybe.com.

Flybe’s assets and operations are now owned by Connect Airways and flights continue to operate as normal.

The deal was able to go ahead after Connect Airways gained European Commission competition approval.

Flybe Group is now a non-trading entity with no subsidiaries and no material assets other than the limited cash received under the deal.

A separate 1p per share offer for the remaining shell company, also made by Connect Airways, remains on the table at a value of £2.2 million.

Shareholders are being urged to accept the offer at a meeting on March 4 or risk receiving no value for their shares.

On Twitter, the carrier said: “Today’s confirmation of the sale of Flybe to Connect Airways secures an exciting future for our customers & employees as we continue to provide vital regional connectivity in the UK & beyond.

“Our confirmed schedule operates as normal and you can book now at flybe.com.”

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I’m sure there are many at FlyBe breathing a sigh of relief with a new future. The Virgin brand seems to generate interest with everything it touches. 

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