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Flybe up for sale!

flybe elmdon74.JPG

After much speculation regarding the future of Flybe the airline has announced it is now for sale. The airline blames difficult trading conditions, continuing Brexit uncertainty and rising fuel prices for it's decision.

Picture by @elmdon74
 
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Me gut feeling says Stobart Group will possibly make a bid as they did try buying Flybe late last year. Daft to think that the entire airline is now worth only £25m.

Also wonder what impact this will have on Eastern Airways Franchise operations?
 
The question is will Stobart be ready to pay £25m and take over all BE's operating costs so soon after they invested £18m at Southend Airport (which pushed them into the red)?
 
I would be surprised if Stobart bid but if it did it might be the only way Flybe survive as an airline as other airlines would just strip it and close it imo.
 
Probably a smart move to be honest. Give the staff and the airline a chance of a future instead of holding out to the last second and running it into the ground.
 
Just heard the news on the radio. Sad to say, do you think that if a buyer is not found, can you see the company going into administration and eventually winding down?
 
Sadly that is a possibility. The longer Brexit rumbles on the more risky it is for potential investors.
 
  • As has been mentioned are Stobart Group really going to be that intrested after being knocked back by Flybe's share holders earlier this year? Like has already being said oh here they are just about in the red after pumping £18m into Southend Airport.
  • IAG could be an interesting option. Let BA have the LCY/LHR slots and make LCY an even stronger focus hub for cityflyer. EI could use some of the fleet to further feed DUB hub and offer more connections intl SHH & ORK and make BHD a EI base. Then they could strip remaining assets. So keep the the most profitable routes flying under either the Flybe or BA city flyer brand and get rid of the loss making parts, eg Project Blackbird and the E190 jets also lose the EXT base HQ and move it to city flyer HQ at MAN or into to waterside at LHR.
  • Also open to consideration must be the likes of Cityjet and Flybmi/Loganair group whom have both successfully restructured themselves in recent years.
  • Even smaller players like Aurginy, Blue Islands and Eastern Airways could come in and replace some of the profitable operations if Flybe was to go into administration. I'm sure the would be many other interested parties ready to come pick up the guicy bits. Eg LCY ops, LHR & MAN slots if that was to eventually happen.
 
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Stobart may well reconsider purchasing the airline given they will now be able to buy Flybe at a knocked down price.

What concerns me now, assuming somebody does buy Flybe, is will the new owner want to strip back the airline? They may decide to offload aircraft that are on lease and just use aircraft the airline owns outright?
 
When flybe floated in 2010 the share price valued the company at £224 million at the end of first days trading it reached £249 million since then its value has steadily declined to £25million which tells you all you need to know and to coin a phrase it looks like they are heading towards the end game. Its all so sad but someone will pick the bones.
To blame the price of oil, the pound and naturally Brexit is really just to cover up the lack of clear and decisive management with a clear plan ( think Jet2) to the detriment of customers and of course staff.
 
I agree @rollo although Brexit and fuel prices maybe involved in their decision, it has been a downward trend for sometime. It's going to take some skill and imagination to bring the airline back from the brink.

I find it odd the airline has sited negative reasons for the sale, it's like saying don't buy us we're not worth having.
 
Looking at this https://otp.investis.com/clients/uk/flybe1/rns/regulatory-story.aspx?cid=59&newsid=1207267


Forward sales in Q3 as at 12th November 2018 show a positive increase in sold seats:
· 6.0% reduction in seat capacity vs. prior year
· 63% of seats sold vs. 59% in the prior year
· 2.0% increase in passenger revenue per seat

"Adjusted profit before tax(1) increased to £14.0m (H1 2017/18: £9.4m). Excluding the impact of the E195 onerous lease, the adjusted profit before tax of £9.9m (H1 2017/18: £9.2m) is slightly ahead of guidance given in the October trading update. "
(1)Adjusted profit before tax is reported profit before tax excluding the revaluation effect of USD aircraft loans



The fundamentals appear to be sound... reduced capacity with more seats sold at a higher premium.

Also taking back maintenance should be a positive as well:
"We are aiming to reduce the time taken on C-checks from 35 days to 29 days with recent evidence showing a 32-day turnaround time "

Less downtime ought to mean fewer occasions when fights get cancelled due to having too many aircraft with tech problems.
 
By closing flybe's share price was down slightly from where they started today.

The more you analyse this, the more it comes back to the same conclusion. Potentially, administration. Asset strip constituent entities to maximise asset disposal values, reconcile debtors and creditors, leave warranties & indemnities insurance to respond to residual liabilities. This might actually be the optimum as opposed to a rescue package by say Stobart Group or IAG as it would come with significant risks.
 
Looking at this https://otp.investis.com/clients/uk/flybe1/rns/regulatory-story.aspx?cid=59&newsid=1207267


Forward sales in Q3 as at 12th November 2018 show a positive increase in sold seats:
· 6.0% reduction in seat capacity vs. prior year
· 63% of seats sold vs. 59% in the prior year
· 2.0% increase in passenger revenue per seat

"Adjusted profit before tax(1) increased to £14.0m (H1 2017/18: £9.4m). Excluding the impact of the E195 onerous lease, the adjusted profit before tax of £9.9m (H1 2017/18: £9.2m) is slightly ahead of guidance given in the October trading update. "
(1)Adjusted profit before tax is reported profit before tax excluding the revaluation effect of USD aircraft loans



The fundamentals appear to be sound... reduced capacity with more seats sold at a higher premium.

Also taking back maintenance should be a positive as well:
"We are aiming to reduce the time taken on C-checks from 35 days to 29 days with recent evidence showing a 32-day turnaround time "

Less downtime ought to mean fewer occasions when fights get cancelled due to having too many aircraft with tech problems.
I like your synopsis @David_itl . People seem far too quick to jump to conclusions and write them off. I don't think too much can be read from the share price.
 
Today they have completed the sale of part of their headquarters at Exeter (hanger one ) for £5million to raise cash for operational purposes. Sold to Exeter airport owners and leased back for 25 years at £515,000 per annum with rent reviews every 5years.
Share price down to 9.6p at close.
 

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