LONDON — Virgin Atlantic, together with the Stobart Group and Cyrus Capital, have announced a bid to save struggling regional airline Flybe, which put itself up for sale at the end of October 2018. The bid is valued at £2.2 million.
All three groups will come together to form Connect Airways with the Flybe’s board at the helm. The three groups have already committed a £20 million bridge long facility, which will support Flybe’s existing operations.
Once the deal is completed, a further £380 million will be provided to invest in the group. It will also include a contribution from Stobart Air.
For now, the Flybe brand will continue to exist; however, it will eventually be rebranded into Virgin Atlantic, marking the official return of the Virgin brand to the regional and domestic market within the UK.
Flybe will be yet another well-known brand that will disappear from the skies.
The carrier was originally founded as Jersey European Airways in 1979, rebranding to British European in 2000. Two years later, the airline was re-named Flybe.
The airline currently has a fleet of 85 aircraft, with an average age of 11.5 years, consisting of a mix of ATRs, Embraer E1 E-Jets, and Bombardier Dash-8s.
The group plans for Flybe to be an independent carrier under the Virgin Atlantic brand—operating with a UK Air Operating Ceritice (AOC), while Stobart Air will continue operating under an Irish one.
The Group will operate independently to Virgin Atlantic, while the management team will be owned 40% by Cyrus Capital, 30% by the Stobart Group, and 30% by Virgin Atlantic Limited.
Christine Ourmieres-Widener, Flybe’s CEO, said that “Flybe plays a vital role in the UK’s transport infrastructure with a UK regional network which uniquely positions it to benefit from growing demands from long haul carriers for passenger feeder traffic.”
“We have successfully implemented a clear strategy in recent years focused on tighter fleet management, improving revenue per seat and increasing load factors. The pursuit of operational excellence has reduced maintenance times and increased efficiencies and customer satisfaction,” she said.
Ourmieres-Widener added that by combining to form a larger, stronger, group, “Flybe will be better placed to withstand these pressures. We aim to provide an even better service to our customers and secure the future for our people.”
From Virgin Atlantic’s side, Shai Weiss, the airline’s CEO, affirmed that “We are pleased to have this opportunity to partner with Stobart Group and Cyrus Capital to bring Virgin Atlantic service excellence to Flybe’s customers.”
“Together, we can provide greater connectivity to our extensive long haul network and that of our joint venture partners Delta Air Lines, at Manchester Airport and London Heathrow. In the near future, this will only increase, through our expanded joint venture partnership with Air France-KLM.”
Warwick Brady, CEO of Stobart Group, added that “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 regional airline consolidation.”
He later added, “The combined entity will be a powerful combination with sufficient scale to compete effectively in the UK and European airline markets. It will allow us to continue to work with Flybe and provides an excellent opportunity to continue to grow passenger numbers at London Southend Airport.”
With this, Virgin Atlantic marks its return into the domestic market. In 2014, the airline’s Little Red venture ended after a short span of unsuccessful operations.
This interaction between Virgin Atlantic, Stobart, and Cyrus Capital represent a rescue for Flybe, which was well on its way to disappear, just like Primera Air and Monarch Air did in 2018.