Flybe

[jfy1999]

Technically it would be Virgin making the bid. As they are a long haul airline it would be a good way for them to get a short haul operation.

To what extent are Delta propping up Virgin? To me this doesn't look like a great move for an airline in debt - to purchase another airline in debt?

 

[Jerry]

To what extent are Delta propping up Virgin? To me this doesn't look like a great move for an airline in debt - to purchase another airline in debt?

I don't know if Delta are propping them up but they have focused Virgin more as a transatlantic airline. Virgin did make a loss but that is largely down to the 787 engine problems i believe. If Virgin are serious about buying Flybe then i'm sure Delta would've been advised and it will be a case of how the purchase of Flybe fits in with the whole Delta, Virgin, KLM and Air France joint venture.

 

[andrew.clarkson]

Hi there all, flybe have only fly to Aberdeen, Edinburgh at present from London Heathrow, not a major headache to worry about.. AndyC

 

[nbdm]

I'm concerned about what parts of Flybe Virgin Atlantic are interested in. From the above report, it seems that LHR slots and feeds into their longhaul flights from LHR and MAN are their aim. Where does this leave the remainder of Flybe's UK operations?
I wonder if Flybe's management are now kicking themselves for not accepting the earlier Stobart bid. It would be interesting to know what that bid was and how it compares to todays market value of Flybe.
Hoping for the best outcome for Flybe, it's emplyees and operating bases.

Kevin

Hi there all, flybe have only fly to Aberdeen, Edinburgh at present from London Heathrow, not a major headache to worry about.. AndyC

To add to this, I think their Heathrow slots are limited to certain destinations for a couple of years after first using them.
The cynic in me says Virgin/Delta/KL/AF may provide Flybe with the cash to continue until that time when those slots can be used for any route.
It would certainly offer them the chance to consolidate some services like the AMS/CDG shuttles onto larger jets with less frequency? Niche routes in the UK would probably suffer

Flybe's market cap of ~£20m isn't a lot really and several other airlines could easily acquire them but of course debts and other liabilities as well as long term health would have to be considered. Although they do have a lot of AMS & LCY slots which are valuable I assume.
Interestingly Flybe announced today they are moving their Gatwick to Newquay service to Heathrow and increasing it to 4x daily.

I don't know if a possible acquisition by Virgin would be a good or bad thing in the long term, of course I want what is best for all employees and hope they can continue!

 

[rollo]

Strange one to me, Virgin Atlantic is 49% owned by Delta the maximum allowed, 31% Air France and 20% Virgin (Branson) so possibilities with the existing feed into Paris and Amsterdam being extended alongside Heathrow outside of that don't see whats in it.
I am starting to wonder if this might tweek interest from BA as they try and kill off anyone who threatens fortress Heathrow remember them buying BMI from Lufthansa, Flybe have ended up with some of those domestic feeds via Little Red who also failed.

Either way something is going to have to happen with Flybe as having raised £5m cash last week they have raised another £3m this week
through a deal on aircraft leasing presumably to help them get through the winter just like Monarch in 2016 and we know what happened twelve months later when more support was required.
Any business that is issuing cash calls to operate is playing a dangerous game.

All I can conclude is watch this space.

 

[David_itl]

To add to this, I think their Heathrow slots are limited to certain destinations for a couple of years after first using them.
The cynic in me says Virgin/Delta/KL/AF may provide Flybe with the cash to continue until that time when those slots can be used for any route.

Except they can't use the slots for anything other than what has been proscribed in the remedy slot order.

possibilities with the existing feed into Paris and Amsterdam being extended alongside Heathrow outside of that don't see whats in it.

So not the large VS operation at MAN that has them codesharing with BE on their routes? Or positioning themselves into a potential for using the extensive BE operation at BHX to allow them look at A330s for some routes with feed. It almost seems an ideal time to strike against IAG's indecision about launching UK long-haul operations by being the prime mover at BHX and further bolstering being the prime premium mover at MAN as they could tap into the hardcore regional BA long-haul frequent flyer base.

 

[jfy1999]

So not the large VS operation at MAN that has them codesharing with BE on their routes? Or positioning themselves into a potential for using the extensive BE operation at BHX to allow them look at A330s for some routes with feed. It almost seems an ideal time to strike against IAG's indecision about launching UK long-haul operations by being the prime mover at BHX and further bolstering being the prime premium mover at MAN as they could tap into the hardcore regional BA long-haul frequent flyer base.

I hope they are planning something like that, but there is plenty of scepticism on the other forum over whether they are simply trying to get IAG involved as happened with BMI.

 

[JF57]

I'm concerned about what parts of Flybe Virgin Atlantic are interested in. From the above report, it seems that LHR slots and feeds into their longhaul flights from LHR and MAN are their aim. Where does this leave the remainder of Flybe's UK operations?
I wonder if Flybe's management are now kicking themselves for not accepting the earlier Stobart bid. It would be interesting to know what that bid was and how it compares to todays market value of Flybe.
Hoping for the best outcome for Flybe, it's emplyees and operating bases.

Kevin

Indeed apart from brand awareness and feeds to Delta / Air France / KLM flights in Amsterdam and Paris it is hard to see what they would get out of Flybe operations at UK airports that don't have Virgin flights already.

Not really looked at size of Stobart compared with Flybe to see how that might work. Also a bit of infighting recently at Stobart which could be worrying.

 

[Coathanger16]

For those saying that there isn't much for Virgin besides extra LHR slots in taking over Flybe, is it worth pointing out that in 2016 Oman Air paid almost £60m for a pair of slots at LHR. Spending £20m on taking over Flybe seems like a pretty good deal to be honest.

As for the slots in question, IIRC the slots Flybe use are as a result of BA buying BMI and that a number of ex-BMI slots had to be used on domestic routes. I believe this only applies for 5 years however. I'm not sure if Virgin buying Flybe would reset the 5 year clock as it was when Virgin Little Red ceased operating and Flybe took the slots, but I'm sure Virgin would consider waiting 5 years before they could use the slots as a fair price considering how cheap these slots would be.

Considering the size of Flybe's base at BHX I'd love to think that a Virgin takeover would maintain the size of Flybe's operation at BHX whilst opening the door for long haul flight from Virgin. I won't hold my breath.

I wonder if Virgin bought Flybe then closed all bases except LHR and MAN, sold the aircraft they no longer needed, how much of the £20m they used to buy Flybe would they get back...?

 

[rollo]

Except they can't use the slots for anything other than what has been proscribed in the remedy slot order.



So not the large VS operation at MAN that has them codesharing with BE on their routes? Or positioning themselves into a potential for using the extensive BE operation at BHX to allow them look at A330s for some routes with feed. It almost seems an ideal time to strike against IAG's indecision about launching UK long-haul operations by being the prime mover at BHX and further bolstering being the prime premium mover at MAN as they could tap into the hardcore regional BA long-haul frequent flyer base.

Apologies due David I intended to add MAN into the equation but somehow forgot ( call it a senior moment) cannot really see Virgin which really means Delta launching long haul from BHX to be honest although Orlando would be a winner, sore point in this neck of the woods.

Once again apologies.

 

[Jerry]

As for the slots in question, IIRC the slots Flybe use are as a result of BA buying BMI and that a number of ex-BMI slots had to be used on domestic routes. I believe this only applies for 5 years however. I'm not sure if Virgin buying Flybe would reset the 5 year clock as it was when Virgin Little Red ceased operating and Flybe took the slots, but I'm sure Virgin would consider waiting 5 years before they could use the slots as a fair price considering how cheap these slots would be.

Even after 5 years i believe that the slots can only be used for EU routes and Cairo and Moscow.

 

[David_itl]

@rollo no need to apologise. Few news outlets will even think of the benefits a Flybe-Virgin tie-up would do for regional long-haul flying, particularly at MAN. Not totally convinced rhat VS woud be so rigid in not operating out of BHX at the right tine ( i.e once the 789 issues are sorted)

 

[BHXsupporter]

Has not Mr Branson a long history of cherry pickig profits and dropping unprofitable routes? I'd fear fro Flybe BHX route structure after such a move irrespective of competition and other regulatory views.

 

[Jerry]

Has not Mr Branson a long history of cherry pickig profits and dropping unprofitable routes? I'd fear fro Flybe BHX route structure after such a move irrespective of competition and other regulatory views.

Branson isn't in charge. Delta is.

 

[BHXsupporter]

Personally I can't believe that Sir R would accept that as a fairly large shareholder his views wouldn't be taken into account - hence my lean that he would be encouraging this as a strategic steal. Meanwhile ...

ANALYSIS: How Virgin could benefit by acquiring Flybe

https://www.flightglobal.com/news/a...irgin-could-benefit-by-acquiring-flyb-453873/

 

[Coathanger16]

Personally I can't believe that Sir R would accept that as a fairly large shareholder his views wouldn't be taken into account - hence my lean that he would be encouraging this as a strategic steal. Meanwhile ...

ANALYSIS: How Virgin could benefit by acquiring Flybe

https://www.flightglobal.com/news/a...irgin-could-benefit-by-acquiring-flyb-453873/

Interesting article. Mostly focuses on the Heathrow/Manchester feeder benefit.

Frustratingly this caught my eye:

"The carrier [Flybe] has significant operations at airports such as Manchester, Exeter, Southampton and some slots at London Heathrow"

I appreciate the appeal of Flybe to Virgin is mostly focused on LHR/MAN, and Flybe is the largest and almost sole operator at Exeter and Southampton, but I would have thought Birmingham could have made it into that list being Flybe's largest base.

 

[Jerry]

Birmingham could have made it into that list being Flybe's largest base.

Yeah you would've thought that their largest base would've been mentioned!

 

[LichfieldBlue]

Shares have gone up 40% this morning with IAG now interested, good or bad news?

 

[Rob c DSA]

Shares have gone up 40% this morning with IAG now interested, good or bad news?

Personally my belief is anything except them somehow carrying on alone which at present they haven't totally ruled out or Stobart getting involved would be bad news for the majority of airports Birmingham included.

 

[smithy108]

Virgin continues to circle Flybe

• 19 DECEMBER, 2018
• SOURCE: FLIGHT DASHBOARD
• LONDON

Virgin Atlantic is still reviewing its options with regard to Flybe a month after first disclosing its interest in the UK regional carrier.
In a stock market notice issued today, Virgin says discussions with Flybe’s management team are continuing and that these include "potentially making an offer" for the Exeter-based airline.
The London-based carrier disclosed its interest in Flybe on 23 November.
Since Flybe disclosed it was putting itself up for sale in mid-November, Virgin is the only party to confirm it is in talks with the regional carrier.
UK media reports have though linked Stobart and IAG as potential suitors. Stobart had an offer rejected for Flybe earlier this year, while IAG - whose British Airways unit remains a small shareholder in Flybe dating back to its sale of BA Connect - has been an active player in airline acquisitions, including the former BMI operation. Both companies have declined to comment on these reports.
Virgin says that in accordance with UK takeover and merger rules, it will place a copy of the announcement on its corporate website no later than noon on 20 December.
Virgin discloses that law firm Rothschild & Sons is acting for it in relation to the talks with Flybe.