Category Archives: Flybe

Cash-strapped Flybe to be sold to a consortium including Stobart Group and Virgin Atlantic Airways, will be rebranded

Flybe has announced it is being sold to a consortium involving Virgin Atlantic Airways.

Virgin Atlantic has a 30 percent interest in the consortium along with the Stobart Group. Stobart Air already operates flights under the Flybe brand.

 

This will be the end of the Flybe brand. The airline will be rebranded under the Virgin Atlantic brand.

Cyrus Capital Partners, a hedge fund, will control the remaining 40 percent share the consortium called Connect Airways.

Flybe issued this formal statement:

RECOMMENDED CASH OFFER for FLYBE GROUP PLC by CONNECT AIRWAYS LIMITED
(a company jointly-owned by DLP Holdings S.à. r.l., Stobart Aviation Limited and Virgin Travel Group Limited, a wholly-owned subsidiary of Virgin Atlantic Limited)

Summary

  • Following the announcement on November 14, 2018 and the launch of the Formal Sale Process with respect to Flybe, the Boards of Flybe and Connect Airways announce that they have reached agreement on the terms of a recommended cash offer for Flybe by Connect Airways pursuant to which Connect Airways will acquire the entire issued and to be issued share capital of Flybe.
  • Under the terms of the Acquisition, Flybe Shareholders will be entitled to receive:

    one (1) pence in cash for each Flybe Share

    which values the entire issued and to be issued share capital of Flybe at approximately £2.2 million on the basis of the fully diluted share capital of 216,656,776 Flybe Shares.

  • Cyrus, Stobart Group and Virgin Atlantic have engaged with Flybe in a collaborative due diligence process since the commencement of the Formal Sale Process, and have formulated the Offer Price after careful review of the due diligence information, the capital needs of Flybe, the challenging trading environment and prevailing market conditions.
  • Concurrently with announcing the Acquisition, Cyrus, Stobart Group and Virgin Atlantic have committed to make available a £20 million bridge loan facility to support Flybe’s ongoing working capital and operational requirements.
  • In addition, following completion of the Acquisition, Cyrus, Stobart Group and Virgin Atlantic are intending to provide up to £80 million of further funding to the Combined Group to invest in its business and support its growth, as well as a contribution of Stobart Air.
  • It is intended that the Acquisition will be effected by means of a Court-sanctioned scheme of arrangement between Flybe and the Scheme Shareholders under Part 26 of the Companies Act.
  • The Acquisition is subject to a number of Conditions and further terms, including the approval of the Scheme by the Scheme Shareholders by the requisite majorities and the sanctioning of the Scheme by the Court. The Conditions are set out in full in Part A of Appendix 1 to this Announcement.

    Connect Airways

  • Connect Airways is a joint venture company the share capital of which is owned 40% by DLP Holdings, S.à. r.l., a company wholly-owned by funds managed by Cyrus, 30% by Stobart Aviation, a wholly-owned subsidiary of Stobart Group, and 30% by Virgin Travel Group Limited, a wholly-owned subsidiary of Virgin Atlantic, the holding company of Virgin Atlantic Airways Limited and Virgin Holidays Limited.
  • It is also expected that, immediately prior to completion of the Acquisition, Connect Airways will acquire Stobart Air, Stobart Group’s regional airline and aircraft leasing business. The combined group is expected to bring benefits to customers, suppliers and employees, providing stability in a tough trading environment.
  • Combined Group
    • Cyrus, Stobart Group and Virgin Atlantic believe that combining Flybe and Stobart Air in a more integrated commercial cooperation with Virgin Atlantic’s long-haul operations will create a fully-fledged UK 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.
    • Such a combination would be a compelling proposition with a comprehensive regional network in the UK and Ireland coupled with an enhanced European footprint, providing greater choice and connectivity for customers to travel to destinations all over the world.
    • The Acquisition will enable Flybe to benefit from committed strategic investment partners in terms of Cyrus, Stobart Group and Virgin Atlantic (through Connect Airways) and from an enhanced presence at London Heathrow Airport and Manchester Airport with potential to grow further in London Southend Airport.
    • The Acquisition and combination with franchise airline, Stobart Air, will provide the Combined Group with an opportunity to increase passenger numbers at London Southend Airport, accelerating its growth for UK and European air travel.

      Recommendation and support for the offer

    • The Flybe Board, who have been advised by Evercore (who are providing independent financial advice to the Flybe Board for the purposes of Rule 3 of the Code) as to the financial terms of the Acquisition, considers the terms of the Acquisition to be fair and reasonable. In providing its financial advice to the Flybe Directors, Evercore has taken into account the commercial assessments of the Flybe Directors.
    • Accordingly, the Flybe Directors believe that the terms of the Acquisition are in the best interests of Flybe Shareholders as a whole and unanimously recommend that Flybe Shareholders vote in favour of the resolutions to be proposed at the Court Meeting and the Flybe General Meeting (or, in the event that the Acquisition is implemented by way of a Takeover Offer, to accept or procure the acceptance of such Takeover Offer).

This revised 2018 livery will be very short-lived (just one aircraft):

Virgin Atlantic issued this statement:

 

The Boards of Flybe and Connect Airways, a company bringing together Virgin Atlantic Limited, Stobart Group and Cyrus Capital, are pleased to announce that they have reached agreement on the terms of a recommended cash offer for Flybe. Following which Connect Airways will acquire the entire issued, and to be issued, share capital of Flybe. Stobart Group will contribute Stobart Air and Propius, Stobart’s aircraft leasing business into Connect Airways.

Concurrently with announcing the Acquisition, Cyrus, Stobart Group and Virgin Atlantic have committed to make available a £20 million bridge loan facility to support Flybe’s ongoing working capital and operational requirements.

In addition, following completion of the Acquisition, Cyrus, Stobart Group and Virgin Atlantic are intending to provide up to £80 million of further funding to the Combined Group to invest in its business and support its growth, as well as a contribution of Stobart Air.

Flybe will continue to serve customers and communities across the UK and Ireland. In due course Flybe will be rebranded to Virgin Atlantic.

The Combined Group will offer significant benefits for customers:

  • Deliver more choice to customers by linking UK regions and Ireland to Virgin Atlantic’s extensive long-haul network through improved connectivity at Manchester Airport and London Heathrow
  • Provide a strong foundation to secure the long-term future of Flybe, its customers and its people by leveraging the combined commercial, operational and functional expertise and scale of Virgin Atlantic and Stobart Group
  • Utilise the strength of the Virgin Atlantic brand, and the offer of an enhanced customer experience in keeping with Virgin Atlantic’s heritage
  • Provide the Combined Group with an enhanced presence at Manchester Airport , London Heathrow Airport, with the potential to grow further in London Southend Airport

The Combined Group intends for Flybe to continue as an independent operating carrier with a separate UK Air Operator Certificate (AOC) under the Virgin Atlantic brand. Stobart Air is intended to continue under a separate Irish AOC.

The Combined Group will operate independently to Virgin Atlantic under one management team, owned 40% by Cyrus Capital Partners, 30% by Stobart Aviation, a wholly owned subsidiary of Stobart Group, and 30% by Virgin Atlantic Limited, the holding company of Virgin Atlantic Airways and Virgin Holidays.

Christine Ourmieres-Widener, Flybe’s CEO said:

“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.

“However, the industry is suffering from higher fuel costs, currency fluctuations and significant uncertainties presented by Brexit. We have been affected by all of these factors which has put pressure on short-term financial performance. At the same time, Flybe suffered from a number of legacy issues that are being addressed but are still adversely affecting cashflows.

“By combining to form a larger, stronger, group, we 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.”

Shai Weiss, CEO of Virgin Atlantic said:

“The Virgin Atlantic brand is built on the foundation of putting customers at the heart of everything we do, providing them with the choice they deserve and a travel experience they love. All possible because of our amazing people.

“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 said:

“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.

“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.”

Lucien Farrell, Partner of Cyrus said:

“We are delighted to be working once again with the Virgin Group following our successful partnership in the launch and eventual sale of Virgin America to Alaska Airlines. We believe Flybe’s strong market position and high quality management together with Virgin Atlantic’s dedication to the best customer experience and Stobart Group’s expertise in regional flying will produce a worldclass airline.

Advertisements

Flybe to operate a new route between Newquay and London Heathrow

Flybe (British European 2nd) Bombardier DHC-8-402 (Q400) G-PRPC (msn 4338) GCI (Nick Dean). Image: 940456.

Flybe, Europe’s largest independent regional airline, on November 22, 2018 responded as follows to the Government Transport Secretary Chris Grayling’s announcement that, with effect from March 31, 2019, it will start operating four times daily flights direct to London Heathrow from Newquay Cornwall Airport under the new Public Service Obligation agreement.

Roy Kinnear, Flybe Chief Commercial Officer, says: “We are naturally delighted to offer customers the opportunity to fly with us between Cornwall Newquay Airport and London Heathrow on this new route with its increased frequency to London four times a day, seven days a week.

“The decision confirms that Flybe is a vital part of the UK’s transport infrastructure.

“We look forward to this new service to London proving popular with its increased frequency and improved opportunities for inbound and outbound connectivity with many other parts of the world – and to welcoming many new passengers on board next year.”

Top Copyright Photo (all others by the airline): Flybe (British European 2nd) Bombardier DHC-8-402 (Q400) G-PRPC (msn 4338) GCI (Nick Dean). Image: 940456.

Flybe aircraft slide show:

x

Flybe revises its livery

Flybe has simplified its livery. The company (like Spirit Airlines) is now operating a fleet with three different liveries.

Photos: Flybe.

The airline unveiled its new livery with this video and on social media: Introducing a new livery for our fleet.  Meet the first Q400 (G-JECP) to be dressed to the nines in purple and white!

Flybe announces its future fleet plans

"Scotland"

Flybe made this announcement:

After a comprehensive review of regional aircraft options, Flybe Group plc (‘Flybe’), Europe’s largest regional airline, has concluded that the Bombardier Q400 is the best core aircraft for its current and future needs. It will therefore remain as the backbone of the Flybe fleet for the foreseeable future.

The Q400 is faster than the alternative turboprops, with a performance close to jet aircraft over the relatively short sectors that Flybe operates. In addition, with excellent operating economics including turboprop fuel efficiency, it is cheaper to operate than similar-sized jet aircraft, and has a much smaller noise footprint. Flybe will however continue to operate a number of Embraer E175 jets for longer or busier routes.

Flybe’s stated strategy is to reduce its overall fleet and to concentrate on profitable routes only. In the past twelve months, Flybe handed back six older end-of-lease Q400s. With a further planned handback of all nine Embraer 195 jets, the overall fleet is well on the way to reducing in size from 85 at its peak in May 2017, to a target of around 70 aircraft by early 2020.

Flybe’s Q400 fleet remains a relatively young one, with an average age of just over 10 years. The airline has accordingly concluded that it will retain its remaining Q400 aircraft and, where economic, extend their service lives. This will save considerable capital expenditure over the next few years, by avoiding the requirement to acquire new aircraft.

Flybe still has a heritage order for four Embraer E175s due in 2019. These will be delivered with new ‘winglet technology’ to help reduce fuel consumption. Apart from these, Flybe is not planning any additional new aircraft orders for the foreseeable future.

Flybe CEO, Christine Ourmières- Widener said: “Flybe’s strategy is to reduce the fleet size to an optimum level and make the business demand-driven rather than capacity-led. Our fleet configuration is an important part of that strategy. We examined exhaustively all the options and concluded the Bombardier Q400 is the best core aircraft for us. Its superior economy, speed and quietness is ideal for a regional airline such as ourselves. Together with a number of Embraer E175s, our future fleet will be the optimum required for our specific regional route network.”

Fred Cromer, President, Bombardier Commercial Aircraft added: “We are delighted that Flybe, our long-term customer and largest Q400 operator, remains committed to the Q400 as its preferred turboprop. With its jet-like performance, industry-leading reliability and unbeatable economics, we are glad that the Q400 turboprop will continue to support Flybe as the airline further imposes itself as one of Europe’s leading regional providers.”

John Slattery, President & CEO of Embraer Commercial Aviation commented: “Flybe’s commitment to the E175 as its regional jet of choice is a great endorsement of the type as a key part of its wider fleet. Now, introducing in its fleet the most updated version of the E175 with lower fuel burn, Flybe will enjoy even greater operating economics on their jet-service routes. We are looking forward to continuing to support and work with Flybe in the future.”

Copyright Photo: Flybe (British European 2nd) Bombardier DHC-8-402 (Q400) G-ECOH (msn 4221) (Scotland) AMD (Ton Jochems). Image: 941876.

Flybe aircraft slide show:

Reuters: Stobart Group is considering a bid for Flybe

Named "Spirit of The Regions"

From Reuters:

British infrastructure and support services firm Stobart Group is considering bidding as part of a consortium to acquire struggling regional carrier Flybe.

Shares in Flybe soared 26 percent on Thursday on the news to 43.5 pence by 1541 GMT, valuing the carrier at almost 105 million pounds.

“A number of potential structures have been considered including taking a non-controlling interest in a vehicle to acquire 100 percent of Flybe likely to be in cash,” Stobart said in a statement.

Reuters had reported earlier on Thursday that Stobart was in talks about a possible deal.

Flybe said it had not received an approach from Stobart about a possible offer and added: “Flybe shareholders are strongly advised to take no action at this stage.”

A spokesman for Stobart declined to identify possible partners in any bid for the airline.

Stobart is eyeing Flybe after the carrier was left vulnerable by a slump in its share price.

Shares traded at more than 90 pence in 2015 but had plunged to as low as 30.75 pence in December 2017, according to Thomson Reuters data, after the airline was hit by faltering demand for its flights.

In other news, Flybe, Europe’s largest regional airline, has given its 650-strong pilot workforce a brand new look that complements the striking purple uniforms of its cabin crew.

The new navy uniform for its pilots features a stylishly fitted jacket with distinctive platinum epaulettes and stripes that clearly designate the rank of Captain (four stripes), Senior First Officer (three) and First Officer (two).

Designed with full crew participation, the brief was for it to be a quality, comfortable, user-friendly outfit to better reflect the airline’s forward looking image than the previous somewhat dated look.  Flybe worked closely with PVM, another Exeter-based business which has been supplying the airline with uniforms for over 10 years, to design and source the new uniform.

The updated look was given its first proud airing at the home ground of the Exeter Chiefs rugby team and current English Premiership champions, of which Flybe is a long-standing sponsor.  One of Flybe’s Exeter-based Senior First Officers pitched in and took flight in a line-out taken with three Chiefs’ players, England International Thomas Waldrom, Scotland International Moray Low and second row player Jonny Hill.

Copyright Photo (all others by Flybe): Flybe (British European 2nd) Bombardier DHC-8-402 (Q400) G-JEDU (msn 4089) AMS (Tony Storck). Image: 938065.

Flybe aircraft slide show:

 

Flybe starts a new advertising slogan

Flybe (British European 2nd) Bombardier DHC-8-402 (Q400) G-PRPC (msn 4338) GCI (Nick Dean). Image: 940456.

Flybe (Exeter) has unveiled a new advertising slogan this month – “Close to you”.

The airline introduced the new slogan to emphasize its local routes.

Flybe is Europe’s largest regional airlines and operates more UK domestic routes than any other carrier.

Copyright Photo: Flybe (British European 2nd) Bombardier DHC-8-402 (Q400) G-PRPC (msn 4338) GCI (Nick Dean). Image: 940456.

Flybe aircraft slide show:

Blue Islands calls for judicial review concerning “illegal service” by newcomer Waves

Flybe (Blue Islands) ATR 72-212A (ATR 72-500) G-ISLK (msn 634) GCI (Nick Dean). Image: 940455.

Blue Islands in December issued this complaint against newcomer Waves. Here is the statement:

Blue Islands has lodged formal legal action with Guernsey’s Royal Court after repeatedly calling on the island’s Transport Licensing Authority to exercise its powers to ensure Waves Technologies Limited apply for the necessary route licences to operate passenger services between Guernsey and Jersey.

The central issue is Waves’ lack of a Guernsey Air Transport Licence, in respect of any aircraft being used for the carriage for reward of passengers or cargo on a flight beginning or ending in Guernsey. This is a requirement of the Air Transport Licensing Law, with Section 1 being quite explicit about this. Not holding one means Waves operations are illegal.

For many months, Blue Islands have repeatedly written to the chair of the Transport Licensing Authority, and have not received any adequate response. The decision to call for a judicial review is intended to compel the Authority to act to uphold the law it is meant to enforce and protect the travelling public from an operator acting outside of the rules. If Blue Islands started operating a daily service on any Aurigny route under the claim of being an air taxi, the TLA would step in and stop it. That is exactly what should have happened here.

Competition on the inter-island route is nothing new, and Blue Islands continues to face it every day with Flybe – even though it is a franchise partner, a seat sold on a Flybe aircraft is of no value to Blue Islands. Previously, Blue Islands and Aurigny vigorously competed on the route, and each lost £1m. a year in the process. Blue Islands believes in competition, and are happy to compete on any of its routes, but competition must be on a level playing field – and not from an operator ignoring the laws. The Air Transport Licensing Law and associated policy statement insists the impact of a new operator on any route is considered and the incumbent operator is given the chance to make an official representation. By ignoring the law the Transport Licensing Authority has denied Blue Islands this opportunity.

Furthermore, Blue Islands is becoming increasingly concerned that innocent investors, caught up by Waves marketing activities are being lured into investing significant sums of money into what they believe to be an innovative ‘air taxi’ service that requires no route licence. Blue Islands do not believe Waves is operating as a legitimate air taxi service and the TLA must evaluate Waves’ claim. This review will ensure all relevant parties formally appraise the legitimacy of Waves business model, its financial fitness and viability, including its recent £17.5m. self-valuation from a business without any tangible means of justifying such a figure either through its trading volumes, asset base or additional markets for an as-yet non-existent product. Although this falls outside the legal action, the clarity this case will bring should usefully serve to protect potential investors from harm. If Waves fails, Guernsey could very well suffer unquantifiable reputational damage.

Air services between Guernsey and Jersey must remain sustainable and continue to provide regular, scheduled services which benefit the whole travelling community – and not just those who can afford the higher Waves ticket price.

Blue Islands is commencing this judicial review to end what is, purely and simply, illegal activity.

Top Copyright Photo (all others by Blue Islands): Blue Islands now operates under Flybe brand. Flybe (Blue Islands) ATR 72-212A (ATR 72-500) G-ISLK (msn 634) GCI (Nick Dean). Image: 940455.

Blue Islands:

Waves:

Bottom Copyright Photo: flywaves.je (Waves) Cessna 208B Grand Caravan 2-CREW (msn 208B2148) GCI (Nick Dean). Image: 940454.

flywaves.je (Waves) Cessna 208B Grand Caravan 2-CREW (msn 208B2148) GCI (Nick Dean). Image: 940454.

Video: