It was easy to identify the biggest losers when Flybe plunged into administration.
[But the winners are……..(Some may also be dismayed by the fees paid to the administrators) – Owl]
Robert Watts www.thetimes.co.uk
More than 2,000 staff lost their jobs when the airline went bust in March. There was also a £96.5m hit to the pension scheme.
Then there were the passengers and other small creditors, who were owed more than £450m when the Exeter-based airline went down, and a hit of more than £50m to the taxpayer.
However, eight months on, the winners in this sorry tale are finally starting to become clearer. A new company called Thyme Opco has bought Flybe’s brand and many of its assets out of administration — and now there are plans for the airline to return in the new year.
The two names on Thyme Opco’s incorporation documents are Lucien Farrell and Jonathan Peachey.
Farrell and Peachey are part of Cyrus Capital, a $4bn (£3bn) transatlantic hedge fund, which had owned 40% of Flybe before its demise. Virgin Atlantic and the Stobart Group each had 30% stakes in what had become the UK’s third-largest airline. It floated in 2010 at 295p a share for a valuation of £200m, but the consortium had bought it for £2.2m — 1p a share — in January last year.
Peachey, 46, is the better-known of the pair. After graduating from Warwick University, he joined PwC in 1996 and trained as an accountant. Two years later, Peachey moved to Virgin and soon became a powerful figure in Sir Richard Branson’s US operations, running the American airline and becoming heavily involved in Virgin Galactic, the space travel venture.
In 2013, Peachey left Virgin to run the wearable tech firm Filip Technologies. Four years later, he became an airlines adviser to Cyrus.
Farrell — also 46, born two days before Peachey — runs Cyrus’s European operation. In 2005, American founder Stephen Friedman hired the Cambridge graduate and Farrell has run that side of the business ever since, building a reputation for artfully buying up distressed debt and making investments in more than 100 companies.
Not all of Farrell’s personal investments have proved a triumph. The Notting Hill-based hedgie was one of more than 500 people — along with the comedian Jimmy Carr and the DJ Chris Moyles — to pour money into an investment scheme clobbered by HM Revenue & Customs for tax avoidance.
The episode led to considerable public scorn for Carr, although Farrell managed to retain his customary low public profile.
During his days at Eton, Farrell struck up a friendship with Ben Elliot, co-founder of the luxury lifestyle business Quintessentially. Elliot is now co-chairman of the Conservative Party and they remain friends, completing the same charity bike rides.
When Flybe secured a tax holiday and potential state bailout two months before its March collapse, Cyrus stressed that Elliot was not involved.
Those who lost money in Flybe’s collapse may also be dismayed by the fees paid to the administrators, EY. With the hourly rate of some of staff working on Flybe exceeding £1,000, EY’s bill has topped £13.9m, and it expects to charge £9m more before the job is done.
The terms of the sale were not made public, making it hard to ascertain just how much of a bargain Farrell and Peachey landed. Nor is it clear how they plan to make their money from what has been a perennial basket case, given the slender demand for regional flights.
“We are extremely excited about the opportunity to relaunch Flybe,” said Cyrus. “The airline is not only a well-known UK brand, it was also the largest regional air carrier in the EU.”
However, with many of the best routes snapped up by rivals in recent months, the new Flybe will have a far less attractive roster of slots. The skies are clear for no one in the pandemic-hit airline industry — least of all Flybe.