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.
Join Independent Minds
For exclusive articles, events and an advertising-free read for just
Get the best of The Independent
With an Independent Minds subscription for just
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.
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.
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.