Flybe: Cash-strapped airline to be rescued by Virgin-led consortium

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Two months after Flybe put itself up for sale, the loss-making regional airline is to be rescued by a consortium led by Virgin Atlantic.

In November, Flybe’s chief executive, Christine Ourmières-Widener, said the airline was struggling with “a recent softening in growth in the short-haul market” as well as higher fuel and currency costs.

Two buyers emerged: Sir Richard Branson’s Virgin Atlantic, and Stobart Air, which already operates some of its flights under the Flybe brand.


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The Independent understands that the two suitors have now teamed up with a hedge fund, Cyrus Capital Partners, to make a combined bid of around £20m.

At the close of business on Thursday, Flybe’s market capitalisation was £36m. But if the bid is successful, the buyers will also need to inject tens of millions of pounds to provide liquidity.

The airline is currently losing £7,000 per hour, as it heads to predicted full-year losses of £12m.

When Flybe floated in 2010, the airline’s market capitalisation briefly reached £250m.

The carrier began as Jersey European in 1979, and continues to serve as the main airline between the Channel Islands and Britain.

If the takeover goes through, these links – as well as Flybe’s core mainland British network – are likely to continue.

The airline operates from Aberdeen, Edinburgh and Glasgow to Manchester, East Midlands, Birmingham, Bristol, Southampton and Exeter. It also has a busy network to and from Belfast City.


Virgin Atlantic revealed as possible buyer for cash-strapped Flybe

Flybe feeds Virgin Atlantic flights at Gatwick, Heathrow and Manchester, and delivers passengers to Air France-KLM on a range of routes to Paris and Amsterdam.

The current network could be tuned to provide maximum connectivity with Virgin services, particularly at Manchester – which, unlike Heathrow and Gatwick, has plenty of scope for expansion.

Virgin Atlantic ran a domestic operation called Little Red from 2013 to 2015, connecting Heathrow with Manchester, Edinburgh and Aberdeen. It folded after heavy losses.

Stobart Air, which owns Southend Airport, may use its stake in the venture to foster expansion at the Essex gateway.

While operations are continuing normally, some of Flybe’s non-core routes – such as Cardiff to Milan, Doncaster to Alicante and Leeds Bradford to Dusseldorf – may not survive a cull if the new owners continue the current “shrink-to-success” strategy.

Flybe has some valuable slots at Heathrow. It will begin a four-flight-a-day link between Heathrow and Newquay, using “remedy slots” surrendered by British Airways, in late March.

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