Tag Archives: Flybe (British European 2nd)

European Commission approves of the acquisition of Flybe by Connect Airways

Flyby's last and soon to be short-lived livery

The European Commission has issued this decision:

The European Commission has approved, under the EU Merger Regulation, the acquisition of UK regional air carrier Flybe by Connect Airways, a consortium by Virgin Atlantic, Stobart Aviation and Cyrus. The decision is conditional on full compliance with commitments offered by Connect Airways.

This decision concerns the proposed acquisition by Connect Airways of (i) Flybe, (ii) Propius Holdings Ltd (“Propius”, Stobart Aviation’s aircraft leasing business) and (iii) Stobart Air Unlimited Company (“Stobart Air”, Stobart Aviation’s operating airline business).

Connect Airways is a consortium founded by Virgin Atlantic, Stobart Aviation and Cyrus. Through the consortium, the three companies will jointly control Flybe, Propius and Stobart Air following the merger.

The Commission’s merger investigation

The Commission investigated the impact of the proposed transaction on the market for air transport of passengers on routes from British airports to other European airports as well as some intra-UK routes.

The Commission’s investigation found that the transaction, as initially notified, would have led to quasi-monopolies on two direct European routes, namely Birmingham – Amsterdam and Birmingham – Paris.

This quasi-monopoly situation would result from Air France-KLM acquiring indirect control over Flybe, via its joint control over Virgin Atlantic. The Commission approved the joint acquisition of Virgin Atlantic by Air France-KLM, Delta and Virgin group in February 2019. The Commission also noted that entry of competitors into these routes would be difficult, considering that both Amsterdam Schiphol and Paris Charles de Gaulle airports are very congested airports.

The Commission also investigated the effects of the transaction on several other markets, such as passenger air transport to/from Amsterdam Schiphol airport, cargo air transport services, ground-handling services or airport infrastructure services but did not find competition concerns in any of these.

The proposed remedies

To address the competition concerns identified by the Commission with regard to the Birmingham – Amsterdam and Birmingham – Paris routes, Connect Airways offered a set of commitments.

Connect Airways committed to the release of five daily slot pairs at Amsterdam Schiphol airport and three daily slot pairs at Paris Charles de Gaulle airport. Under the proposed commitments, these slots will be released to competing airlines that want to fly the Birmingham – Amsterdam and Birmingham – Paris routes.

The commitments fully address the competition concerns identified by the Commission regarding Connect Airways’ acquisition of Flybe. The Commission therefore concluded that the proposed transaction, as modified by the final commitments, would no longer raise competition concerns. This decision is conditional upon full compliance with the commitments.

The Commission’s derogation decision of February 21, 2019

Under the EU Merger Regulation, companies have the obligation not to implement a notifiable transaction before it has been declared compatible with the common market (Article 7(1) of the EU Merger Regulation). This serves to avoid that competition could be harmed beyond repair before the Commission has taken its decision. At the same time, EU merger rules enable the Commission to give a temporary approval for certain parts of a transaction (on the basis of Article 7(3) of the Merger Regulation) in a way that does not harm effective competition, and in order to avoid negative effects for consumers.

On 21 February 2019, the Commission granted Connect Airways such a derogation. As a result, Connect Airways was allowed to acquire Flybe’s shares prior to the merger clearance, subject to strict conditions, in particular related to voting rights. The derogation decision helped prevent flight cancellations to the detriment of consumers and helped avoid staff layoffs, while the merger review was ongoing.

Companies and products

Flybe, based in the UK, is a British regional airline with a focus on short-haul, point-to-point flights. It currently operates 190 routes serving 12 countries from 73 departure points in the United Kingdom and other European countries.

Cyrus, based in the US, is an investment adviser and an investor in public and private airlines.

Stobart Group, based in Guernsey, is active in aviation and infrastructure markets, including (i) operating regional airline Stobart Air and (ii) developing London Southend Airport.

Virgin Atlantic, is the ultimate holding company of international passenger airline Virgin Atlantic Airways and international tour operator Virgin Holidays. Virgin Atlantic is currently controlled by Virgin Group and Delta Air Lines. On 12 February 2019, the Commission cleared unconditionally the proposed acquisition of joint control by Virgin Group, Delta Air Lines and Air France-KLM over Virgin Atlantic.

Air France-KLM, based in France, is the holding company of Air France, the French national carrier airline and KLM, the Dutch national carrier airline. The company provides passenger air transport services, cargo air transport services and maintenance, repair and overhaul services.

Connect Airways issued this statement:

Connect Airways Limited (Connect Airways) has received merger control clearance from the European Commission for its acquisition of Flybe Limited (Flybe), Propius Holdings Ltd (Propius), and its investment in Stobart Air Unlimited Company (Stobart Air), securing Flybe’s long-term future and providing more choice for customers across the UK.

With Connect Airways taking over full management control of the business, Mark Anderson (CEO, Connect Airways) and with the leadership teams from Flybe and Stobart Air will now focus on plans to grow Flybe’s regional network, as well as expanding Stobart Air’s successful franchise business.

Connect Airways will offer significant benefits for customers:

  • A foundation to secure Flybe’s long-term future, building on the strong financial backing and expertise of  Virgin Atlantic, Stobart Group and Cyrus
  • More choice for customers through improved connectivity between UK regional airports and Virgin Atlantic’s extensive long-haul network, particularly at London Heathrow and Manchester Airports
  • An enhanced customer experience in line with the Virgin brand, which Connect Airways will use in due course
  • A leading franchise-flying business, via its investment in Stobart Air’s market-leading proposition

Work is also underway to develop an exciting new brand and customer proposition, which will be announced in due course.

Top Copyright Photo: This will be Flybe’s last livery which was very limited and now short-lived. Flybe (British European 2nd) Bombardier DHC-8-402 (Q400) G-JECP (msn 4136) SOU (Antony J. Best). Image: 946881.

Flybe aircraft slide show:

 

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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:

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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:

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: