Article Written by Thomas Saunders
LONDON – Flybe has been sold to Connect Airways, a consortium of Virgin Atlantic and Stobart Aviation, holding 60% between the two airlines. The remaining 40% is held by the Cyprus Capital Partners subsidiary DLP Holdings.
As of 21st February 2019, Flybe and Flybe.com (as they are separate companies) have been transferred to Connect Airways.
On March 4th, a meeting has been scheduled to vote on the Share Purchase Agreement from Connect Airways.
If the scheme is voted against, shareholders are unlikely to see any money for their shares, however, if the vote is in favour of the agreement, the shareholders would receive £0.01 per share.
This week, we saw a second bid from Mesa Air Group, an American Airlines backed company. Unlike the Connect Airways offer, the Mesa offer is also backed by the ex Stobart chief Andrew Tinker, who was against the Connect Airways offer, in part due to the stock price.
Whilst the offer was “preliminary and highly conditional”, the offer would have been a £20 million pound bridge loan, with £80 million to follow. However, there were no mentioned prices for shares.
Had the deal with Mesa been accepted, we could have seen Flybe working closely with American Airways.
Being a OneWorld alliance member, this could have been a counterintuitive move given their current codeshares stand with airlines outside of alliances, Virgin Atlantic and Emirates being notable examples and airlines in various Alliances.
Whilst there isn’t a definitive statement on the reasons behind the Mesa offer rejection, it is safe to assume a potential tye into an alliance in the longer term may have been off-putting.
In contrast to those potential issues, a definite advantage is the closer tye to Virgin Atlantic, a fantastic codeshare to Flybe. The Flybe brand will be retired over time, and replaced with Virgin Atlantic.
This puts a globally recognised brand on the face of a UK Regional airline, which could also bring a boost to UK Regional economy, with more people open to the idea of visiting lesser known parts of the UK.
Ultimately, however, the fact that a deal has been agreed ensures that in the immediate future anyway, the jobs of Flybe employees are safe, and the more unique/obscure routes that they operate will continue to operate.