Flybe bought by Virgin-led consortium

Lloyd Doyle
January 12, 2019

The consortium, Connect Airways - which comprises Virgin Atlantic, Stobart Group and Cyrus Capital - will acquire the entire issued, and to be issued, share capital of the company for £2.2m and has also committed to making a £20m bridge loan facility available to support Flybe's ongoing requirements.

Flybe, still one of the UK's best-known airlines despite its troubles, put itself up for sale back in November after a slump in first-half profits.

The move would represent a return to short-haul aviation for Virgin Atlantic just over four years after the closure of its Little Red operation.

"The board of Stobart Group believes that bringing Stobart Air together with Flybe and partnering with Virgin Atlantic and Cyrus Capital is the best way for us to play an active role in United Kingdom regional flying", he said. The new owners will rebrand Flybe as Virgin Atlantic but Stobart Air, which will also become part of the group, will exist separately.

This will be followed by a further £80 investment in future months.

"T$3 he industry is suffering from higher fuel costs, currency fluctuations and significant uncertainties presented by Brexit", said Christine Ourmières-Widener, CEO of Flybe.

The carrier will be purchased via Connect Airways, in which Virgin and Stobart each have 30 percent stakes, with the balance held by Cyrus.

It has been reported that the bidding price for Flybe will be significantly lower than its market value (£36.06 million), at the close of business on Thursday. We have been affected by all of these factors which has put pressure on short-term financial performance. Stobart Air operates a wet lease and aircraft leasing business.

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

Flybe will continue as an independent operating carrier with a separate Air Operator Certificate, under the Virgin Atlantic brand.

The consortium's bid, if accepted by shareholders, would seek to feed regional customers to the long-haul networks of Virgin Atlantic and its American joint venture partner, Delta Air Lines, at Heathrow and Manchester airports.

Warwick Brady, boss of Southend Airport owner Stobart Group, advised by Barclays, said the takeover is an "excellent opportunity" to grow passenger numbers at the airport, and to "play an active role in United Kingdom regional flying".

"The combined entity will be a powerful combination with sufficient scale to compete effectively in the United Kingdom and European airline markets", added the former Easyjet executive.

Other reports by Iphone Fresh

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