Monday, 22 July, 2019

Flybe shareholders urged to accept Virgin Atlantic's £2.2m takeover offer

Flybe Bombardier Dash 8 Q400 Flybe Bombardier Dash 8 Q400
Ginger Lawrence | 14 January, 2019, 02:14

Connect Airways will also buy Stobart Group's regional airline and aircraft leasing business and combine the two acquired businesses. Stobart Air is meant to continue under a separate Irish AOC.

Flybe chief executive Christine Ourmieres-Widener said "We have been affected by all of these factors which have put pressure on short-term financial performance".

'However, the industry is suffering from higher fuel costs, currency fluctuations and significant uncertainties presented by Brexit'.

A source close to Mr Tinkler said on Friday evening that he was not seeking to disrupt the proposed 1p-a-share takeover of Flybe, which is being led by Virgin Atlantic Airways and also includes Cyrus Capital Partners, an investment fund.

'At the same time, Flybe suffered from a number of legacy issues that are being addressed but are still adversely affecting cashflows.

The name of the consortium perhaps hints at the key interest for Virgin Atlantic as it will allow flights to operate as "feeder" flights to Virgins operations at Heathrow and Manchester from smaller regional airports, something it already does in a codeshare agreement but now, being part of the same airline it can offer improved connectivity.

Shai Weiss, chief executive of Virgin Atlantic, added: "We are pleased to have this opportunity to partner with Stobart Group and Cyrus to bring Virgin Atlantic service excellence to Flybe's customers".

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Connect Airways believes that combining Flybe and Stobart Air in a "more integrated commercial cooperation" with Virgin Atlantic's long-haul operations will create a "fully-fledged United Kingdom network carrier under the Virgin Atlantic brand, alongside Stobart Air's wet lease operations and aircraft leasing business, which will continue to operate as it does today".

In the meantime it says it will continue to support Flybe and the Ports of Jersey route development team will be "happy to have discussions" with any new owners.

Stobart Group's aviation unit and Virgin Atlantic will each hold 30%.

Councillor Ian Thomas, leader of East Devon District Council said: "I welcome this latest development towards confirming future ownership of Flybe". All possible because of our incredible people.

"The combined entity will be a powerful combination with sufficient scale to compete effectively in the United Kingdom and European airline markets". Mr Branson sold a 31pc stake in Virgin Atlantic to Air France-KLM in 2017, and retains a 20pc holding in the airline.

Stobart owns London Southend Airport and past year secured a significant coup when it announced that Ryanair will establish a base at the gateway from this summer, operating 13 routes to eight countries.