VIRGIN Atlantic and Stobart have teamed up to buy Flybe,the struggling regional airlinewhich operates flights from a range of Scottish airports, for just £2.2 million.
The companies, working with the Cyrus Capital Partnersinvestment firm, have made a recommended offer of just 1p cash per share for Flybe, which put itself up for sale in November.
News of the offer sent shares in Flybe tumbling after they closed at 16.38p on Thursday.
Chief executive Christine Ourmieres-Widener said the Exeter-based carrier had been hit by higher fuel costs, currency fluctuations and Brexit uncertainty, which had 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,” she said.
“By combining to form a larger, stronger group, we will be better placed to withstand these pressures.”
Ms Ourmieres-Widener said Flybe’s regional networkpositioned it well to benefit from growing demand from long-haul carriers for passenger feeder traffic.
Flybe has crew bases in Glasgow, Edinburgh and Aberdeen. It operates flights from Aberdeen, Edinburgh, Glasgow, Inverness, Stornoway and Wick to airports in the UK and on the continent.
Loganair operated flights for Flybe under a long-standing agreement that came to an end in 2017 after the firms failed to agree a renewed contract.
Flybe will be combined with Stobart Air in a joint venture called Connect Airways.
Cyrus will own 40 per cent of the new company, while Virgin and Stobart will take 30% each
The three companies have committed to make a £20m bridge available to support Flybe’s current operations. An additional £80m will be provided to the combined group.
CREDIT: Mark Williamson
Copyright Newsquest (Herald & Times) Ltd Jan 12, 2019, source Newspapers