Flybe Sold To Virgin and Stobart
By Sofy Robertson
Exeter-based Flybe is being bought for £2.2m by a consortium that includes Virgin Atlantic and the Stobart Group.
The airline will operate under the Virgin Atlantic brand, marking a return by Virgin domestic flights, following their failed attempt five years ago.
The Exeter-based company carries around eight million passengers a year from airports including Southampton, Aberdeen and Cardiff as well as many other airports across the UK and Europe.
The sale of the airline follows Flybe’s profit warnings in October.
Shareholders in Flybe will receive 1p a share, while the consortium, which also includes venture capital firm Cyrus, will inject £100m.
The 1p-a-share office is drastically below the 295p at which they were floated in 2010 and the 30p levels at which they were trading before the October profits warning.
Flybe’s chief executive, Christine Ourmières-Widener, explained that the industry has been suffering from higher duel costs, currency fluctuations and “significant uncertainties” posed by Brexit (BBC). She continued:
“We have been affected by all of these factors which have put pressure on short-term financial performance.”
In order to support the ongoing operations of the airline, the consortium, known as Connect Airways, will lend Flybe £20m initially.
A further £80m investment in Flybe is planned, which describes itself as Europe’s largest regional airline.
Connect Airways will also buy Stobart Group’s regional airline and aircraft leasing business.
The group explained their aim to “create a fully-fledged UK network carrier under the Virgin Atlantic brand”. This will provide an opportunity for Virgin, which currently focuses on long-haul, to expand in the UK.
Chief executive of the Stobart Group, Warwick Brady, said that it would also be an opportunity to expand passenger numbers at Southend airport, which it owns, along with Carlisle airport.
The consortium assured that they would “secure the long-term future of Flybe, to the benefit of local communities, customers and its people”.