Virgin Atlantic consortium agrees to buy Flybe

Jeannie Matthews
January 14, 2019

Virgin Atlantic and a consortium of other buyers are looking to takeover struggling United Kingdom regional airline Flybe in a $2.8 million (£2.2 million) deal. The purchase price for Flybe is just £3.2m giving an indication of just how bad things were at the airline.

The regional airline put itself up for sale past year after after a profit warning.

'This will be timed to coincide with a refurbishment programme for Flybe's fleet to provide a seamless customer experience in keeping with Virgin Atlantic's heritage'.

The plans will see the airline combined with Stobart Air and called Connect Airways.

This will be followed by a further £80 investment in future months. Connect is jointly-owned by DLP Holdings S.à. r.l., Stobart Aviation and Virgin Travel Group.

Flybe to fly on but under the name Connect Airways.

Flybe bosses have unanimously recommended the offer, with chief executive Christine Ourmières-Widener saying that being part of the enlarged group leaves it "better placed" to withstand some of the issues it is facing.

"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 United Kingdom network carrier under the Virgin Atlantic brand", they said in the statement.

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The statement said the new airline would "continue to serve customers and communities across the United Kingdom and Ireland", but stopped short of making any specific pledges about whether all the routes FlyBe now services would continue to exist in the new world.

Flybe will continue as an independent operating carrier with a separate Air Operator Certificate, under the Virgin Atlantic brand.

"At Exeter we're committed to supporting growth by providing the best possible service to people in the region and extending the choice of routes from their local airport".

Virgin Atlantic chief executive Shai Weiss, whose firm is being advised by Rothschild, said: "Together, we can provide excellent connectivity to our extensive long haul network and that of our joint venture partner, Delta Air Lines, at London Heathrow Airport and Manchester Airport for the benefit of our customers".

For Stobart Group, which had already run the slide rule over Flybe a year ago, the deal gives it scale to compete in the European short-haul market and to grow passenger numbers at Southend airport.

"In the near future, this will only increase, through our expanded joint venture partnership with Air France-KLM".

Warwick Brady, boss of Southend Airport owner Stobart Group, advised by Barclays, said the takeover is an "excellent opportunity" to grow passenger numbers at the airport, and to "play an active role in United Kingdom regional flying".

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