“Doubts cast over Flybe staying at its Exeter headquarters”

“The new chief executive of Flybe has hinted that Devon will have to work with the airline to ensure its headquarters remains at Exeter Airport.

Flybe ran into financial difficulties last year and was rescued by a consortium of Virgin Atlantic, Stobart Group and Cyrus.

This week it announced that the airline would be rebranded Virgin Connect, an exercise that will begin next spring.

Chief executive Mark Anderson spoke publicly yesterday for the first time, making it clear that a major restructuring exercise was under way.

He did not deny that job losses would be required, but said it was too early to be specific, saying: “It could be that there will be a number of roles that are impacted, but we haven’t yet got to numbers.

“Can I guarantee everyone a job for life? The answer is no I can’t.” …”

https://www.devonlive.com/news/devon-news/doubts-cast-over-flybe-staying-3435866#comments-section

Was Owl right about why Virgin bought Flybe? Yes!

Here is Owl’s theory:

https://eastdevonwatch.org/2019/04/04/flybe-leaving-or-not-on-a-jet-plane/

and, in today’s Sunday Times its Chief Executive says:

“… Flybe will be profitable [for Virgin] … It has established slots at Heathrow and hundreds in Manchester. What will the rebranded carrier be called? “Virgin Something”. We have not made up our mind”. …”

Source: Sunday Times business supplement, page 6

Round One to Owl!

Flybe – leaving (or not) on a jet plane …..

Flybe has jet and propellor aircraft.
Flybe is now owned by Virgin Atlantic and Stobart Air.
Virgin is interested only in feeder traffic to its Manchester and Heathrow hubs.
Stobart has heavily invested in its Southend and Carlisle hubs.
Flybe is cutting all its jet flights from Exeter and several other regional airports in October 2019 and returning all jets to lease owners.
Flybe jet pilots will become redundant and Flybe’s Exeter airport traffic (and repair hub) will be decimated.
There is a worldwide shortage of jet pilots.
How many former Flybe jet pilots will later be employed by Virgin and Stobart on non-Flybe routes?

Would this scenario be an intended or unintended consequence of the decision?

More bad news on Flybe Exeter

“All Flybe jet flights are to end from Exeter Airport when its summer timetable finishes in October, airline bosses say.

The move, which is part of plans to cuts its fleet from 85 aircraft to between 70 and 75, will affect routes including Faro, Mallorca and Malaga.

The company apologised, blaming an industry-wide shortage of pilots for the delays, as well as its own pilots taking holidays.

The airline had also entered discussions over potential job losses, but it hoped to keep loyal employees “with Flybe”, airline chief executive Christine Ourmieres-Widener said.

She was speaking after the Exeter-based regional airline cancelled dozens of flights on Wednesday morning.”

https://www.bbc.co.uk/news/live/uk-england-devon-47708796

“Flybe confirms ‘base restructuring’ amidst rumours all Exeter flights could be scrapped”

Owl says: what the hell is happening? One minute we are told of new routes (including Flybe) and the next the talk is of all Flybe routes being cancelled! Would the airport (into which DCC and EDDC are pouring money into for infrastructure improvements) then be viable?

“Exeter-based airline Flybe has confirmed it is undertaking a ‘base restructuring’ after reports this morning that all jet-plane flights from Exeter, Cardiff and Doncaster are to be scrapped.

In a statement on the reason 27 Flybe flights were cancelled this morning the airline confirmed that ‘base restructuring’ is part of the reason.Pilots and cabin crews are believed to have been called into meetings since 4am this morning to be told the news, which has added to the delays.

According to UK Aviation News pilots have been told the decisions comes after a “critical review of the business performance”.

If true it means jet flights will cease operating from Exeter this summer, leaving the company to operate just Dash 8 Q400 planes – the type that makes shorter journeys such as Exeter to London.

Flybe this morning confirmed ‘base restructuring’ was under way, and said that is part of the reason a number of flights were cancelled on Wednesday.

UK Aviation News says the move could be ‘potentially devastating’ for Exeter Airport. …”

https://www.devonlive.com/news/devon-news/flybe-confirms-base-restructuring-could-2715437

To Flybe or not to Flybe, that is the question

“Regional airline Flybe has cancelled dozens of flights on Wednesday morning for what it describes as “operational reasons”.

Five flights from Belfast City Airport and four from Birmingham are among those affected, along with departures from Southampton, Aberdeen, Edinburgh and Newcastle.

Most of the flights are within the UK.

The airline said it would like to “sincerely apologise for any inconvenience caused”….

… On Monday, Flybe passengers on a new route were left with a six-hour coach journey when their aircraft was grounded.

The 18:40 service from Newquay to Heathrow could not take off on Sunday because of a “technical issue”.

Cornwall Airport Newquay said passengers were offered “rebooking for another flight or ground transport to London Heathrow”. …”

https://www.bbc.co.uk/news/business-47797738

“Flybe completes sale to Virgin-led consortium for £2.8m”

“Exeter-based regional airline Flybe has been bought by a consortium led by Virgin Atlantic.

Connect Airways, which consists of Virgin, Stobart Air and Cyrus Capital, paid £2.8m for the airline on Friday.

It now means that flights currently operated by Flybe will soon be taking off under the Virgin brand.

Cyrus Capital now own 40 per cent of the Exeter-based airline, with Virgin and Stobart acquiring a 30 per cent stake each.

Flybe tweeted about the takeover on Friday night: “Today’s confirmation of the sale of Flybe to Connect Airways secures an exciting future for our customers & employees as we continue to provide vital regional connectivity in the UK & beyond. …”

https://www.devonlive.com/news/devon-news/flybe-completes-sale-virgin-led-2571675

Flybe rejects second bid as too late

“Troubled Exeter-based regional airline Flybe has snubbed a rival rescue proposal from investors including US airline Mesa Air Group and backed by former Stobart boss Andrew Tinkler.

Shares in Flybe more than doubled to 2.9p as it confirmed the “highly conditional” approach from a consortium including Mesa Airlines of Arizona and South African hedge fund Bateleur Capital.

But Flybe said it “does not believe that the indicative proposal is executable in the timeframe required to enable Flybe to continue to trade”.

It added it continues to back the existing takeover by the Connect Airways consortium – which consists of Sir Richard Branson’s Virgin Atlantic, Stobart Group and investment firm Cyrus Capital – as the “only viable option available to the company which provides the security that the business needs to continue to trade successfully”.

https://www.bbc.co.uk/news/live/uk-england-devon-47226619

“Flybe or Flybmi? Airline reassures passengers after rival goes into administration”

“… Flybe has now spoken out to reassure users that it bears no relation to Flybmi.

A post on Twitter said: “We are very sorry to hear about the situation with the competing British regional airline Flybmi and our thoughts are with their employees during these difficult times.

“Flybe has nothing to do with Flybmi and our flights continue to operate as normal.”

But while flights may be unaffected, the airline is currently mid way through a takeover that could affect passengers later this Spring.

The company is currently being bought out by the firm behind Virgin Atlantic in a £2.2 million takeover.

It comes after the carrier put itself up for sale in November, placing 2,300 jobs at risk, just weeks after issuing a profit warning.

Speaking on what this means for customers, a Flybe spokeswoman told Mirror Money no changes to schedules are expected.

“There will also be no changes to bookings from its website, while existing flights won’t be affected by the announcement,” a comment added.

On twitter, the Exeter-based airline said: “Flights will continue to operate as per our published schedule and you can continue to book flights with us at Flybe.com “.

And speaking about flights over the summer holidays, it said: “Flybe with its consortium including Virgin Atlantic & Stobart Group would like to reassure passengers that there will be no major change to our published schedules to the end of Summer 2019 (i.e. end of Oct 19).”

Flybe, whose roots date back to 1979, has 78 planes operating from smaller airports such as London City, Southampton, Cardiff, Aberdeen and Norwich to destinations in the UK and Europe.

It serves about eight million passengers a year, but has been struggling to recover from a costly IT overhaul and has been trying to reduce costs. …”

https://www.mirror.co.uk/money/flybe-flybmi-airline-reassures-passengers-14014234

” FlyBMI [ NOT Flybe] collapses, blaming Brexit uncertainty

“The airline has faced several difficulties, including recent spikes in fuel and carbon costs, the latter arising from the EU’s recent decision to exclude UK airlines from full participation in the Emissions Trading Scheme. These issues have undermined efforts to move the airline into profit.

“Current trading and future prospects have also been seriously affected by the uncertainty created by the Brexit process, which has led to our inability to secure valuable flying contracts in Europe and lack of confidence around BMI’s ability to continue flying between destinations in Europe.

“Additionally, our situation mirrors wider difficulties in the regional airline industry which have been well documented.”

The company operates scheduled passenger services to 24 destinations, including Brussels, Leeds, Munich and Bristol using its fleet of 17 Embraer jets.

Passengers about to board a flight to Munich from Bristol were told their flight had been cancelled after they had checked in and the company’s planes that were in Brussels were called back.

Aircrew were told not to come to work and those due to be abroad for the weekend were flown back.”

https://www.theguardian.com/business/2019/feb/16/flybmi-collapses-blaming-brexit-uncertainty

“Flybe will wind up company if shareholders reject sale”

“Flybe has warned shareholders it will wind up the company if they do not back a sale to a consortium led by Virgin Atlantic and Stobart Air.

The airline said failure to approve a sale would mean investors were unlikely to get anything for their shares.
The airline’s board agreed the £2.2m sale to Connect Airways group last month, but the deal needs investor approval at a meeting on 4 March.

Flybe acknowledged the offer of 1 penny per share was “disappointingly low”.

However, it said it was the only rescue plan on the table.
In a statement on Thursday, Flybe said: “If the [sale] scheme is not approved, the Flybe directors intend to take steps to wind-up the company and shareholders are likely to receive no value for their shares in Flybe.”

Based in Exeter, Flybe carries about eight million passengers a year from airports such as Southampton, Cardiff and Aberdeen, to the UK and Europe.

It put itself up for sale last November, following a profits warning the previous month. …”

https://www.bbc.co.uk/news/47165902

Fight for Flybe

“Former Stobart chief executive Andrew Tinkler has made a capital injection offer for ailing airline Flybe as it prepares to complete a proposed sale to a group led by Virgin Atlantic.

The Flybe board today confirmed it had received a “very preliminary, short and highly conditional outline contingency proposal” from Tinkler, who was fired from the Stobart board last summer amid a row with incumbent chairman Ian Ferguson.

Flybe said the proposal “envisages a capital injection and replacement of the funding provided by Connect Airways”, the Virgin-led group which offered to provide a £20m liquidity injection to keep the carrier afloat last month/ It will also make up to £80m available in further funding.

Flybe said Connect Airways had provided the first £15m of the £20m credit facility it announced in January.

“Flybe confirms that its advisers have held an initial discussion with Mr Tinkler’s advisers in relation to the preliminary proposal and that no formal proposal was made,” it said. “For the avoidance of doubt, the preliminary proposal does not contemplate an offer for the whole of Flybe or any other acquisition structure.”

Flybe said the capital injection proposed by Tinkler would only be provided if the the airline’s sale to Connect Airways did not go through. …”

http://www.cityam.com/272618/former-stobart-boss-andrew-tinkler-makes-capital-injection

“Flybe pensioners risk losing all if Virgin takeover bid fails”

“Flybe pensioners could face financial ruin if a rescue takeover led by Virgin Atlantic falls through, after it emerged that the airline’s retirement fund is 
not protected by Britain’s pension 
lifeboat.

Some £170m of benefits owed to 1,350 members of the British Regional Airlines Group pension scheme may be wiped out if the Exeter-based airline failed because Flybe’s pension fund is registered in the Isle of Man, rather than the UK.

This means scheme members are not entitled to payments from the 
Pension Protection Fund (PPF) in the event of an insolvency. Flybe had a £11.6m pension shortfall in November 2018. …”

https://www.telegraph.co.uk/business/2019/02/02/flybe-pensioners-risk-losing-virgin-takeover-bid-fails/

Flybe – trouble at the top

“A battle over the cut-price sale of Flybe will gather pace next week after the airline’s biggest shareholder demanded the sacking of its chairman.

Sky News has learnt that Hosking Partners wrote to Flybe on Friday to requisition an extraordinary general meeting (EGM) aimed at ousting Simon Laffin, the City grandee who has chaired Flybe for five years.

The fund management firm run by Jeremy Hosking, a prominent investor, wants to install Eric Kohn, an experienced aviation executive, in Mr Laffin’s place.

A statement confirming the EGM request is expected to be made by Flybe to the London Stock Exchange as soon as Monday morning….”

https://www.theguardian.com/business/2019/jan/26/small-supermarket-wales-owned-surrey-casino-property

Flybe biggest shareholder threatens legal challenge to Virgin/Stobart takeover

Owl says: East Devon really does seem to be a very complicated place to do business!

“Flybe’s biggest shareholder has launched a stunning attack on its directors, accusing them of breaching their duties to investors and threatening a legal challenge to the cut-price takeover of one of Britain’s best-known airlines.

Sky News has learnt that Hosking Partners, a prominent London-based asset manager which holds a stake of close to 19% in Flybe, has instructed lawyers to explore its options in relation to the company’s proposed sale to a consortium‎ led by Virgin Atlantic Airways.

These options could include attempting to obtain an injunction prohibiting the deal from being completed, Hosking Partners is understood to have warned Flybe’s bosses this week.

The initial 1p-a-share deal, announced eight days ago, came at a huge discount to the airline’s prevailing share price and underscored its industry’s profound financial challenges.

In a letter to the directors of Flybe, details of which have been relayed to Sky News, Hosking Partners is understood to have expressed concern that they had allowed a false market in the company’s shares to develop by failing to update the City on its financial position in a timely fashion.

‎The fund manager, a long-standing shareholder in Flybe, is understood to have copied its ‎letter to City watchdogs including the Takeover Panel, which polices mergers and ‎acquisitions activity, and the Financial Conduct Authority.

Hosking Partners is said to have raised doubts as to whether the £2.2m offer reflected the intrinsic value of Flybe, and alleged that the handling of its proposed sale had blocked a rival offer from emerging at a higher price.

Flybe’s fate took a further twist this week when it said that its sale to Connect Airways – a consortium comprising Virgin Atlantic, Stobart Group and Cyrus Capital Partners,‎ an investment fund with links to the other two parties – would be restructured.

‎Instead of simply comprising a conventional offer for the shares, Flybe’s trading assets would be sold next month to Connect Airways for £2.8m, leaving the holding company as‎ a shell for which ‎the consortium would continue to pay a nominal sum.

Flybe said this change had been necessitated by its urgent need for liquidity – a claim challenged by Hosking Partners because of the company’s cash balance and ability to raise funds from the sale of assets such as its take-off and landing slots at London Gatwick Airport.

In a statement to the market on Tuesday, Flybe said it had had no alternative but to agree to the revisions because unspecified conditions attached to a bridging loan had not been met.

Hosking and other shareholders are said to be furious about the restructuring of the takeover because Flybe’s recent switch from a premium to a standard listing on the London market meant investor approval was now only required for the holding company bid, not the sale of the airline’s assets.

The fund manager is understood to have told Flybe directors that other parties remained interested in acquiring the airline but would now be unable to make an offer.

At the 1p-a-share offer price, Hosking Partners’ stake is worth roughly £400,000.

If it escalates, the row could pose significant reputational risks to the board of Flybe, which is chaired by Simon Laffin, a City grandee who has served as a director of companies including Mitchells & Butlers, Northern Rock and Safeway.

Investors’ anger has been exacerbated by the fact that early last year, Stobart made a takeover approach to Flybe understood to have been valued at roughly 40p-a-share.

This was rejected by Flybe’s board.

In a further development, Sky News revealed last week that Stobart’s estranged former chief executive, Andrew Tinkler, had himself swooped to snap up a stake of more than 10%‎ in Flybe.

Until as recently as this month, it appeared that Virgin Atlantic and Stobart were ‎likely to table competing offers for the regional airline, before it emerged that they had teamed up as part of the same consortium.

Hosking is understood to have raised concerns in its letter about the process through which they were permitted to form an alliance, although one source close to Flybe said that it had not breached any undertakings by doing so.

The investor is also said to have highlighted the rise in Stobart Group’s share price following confirmation of the 1p-a-share bid as evidence of “value transfer” from Flybe to one of its acquirers, according to a City source.

Under their plans, Stobart Air will be folded‎ into Connect, with all of Flybe’s services re-branded under the Virgin Atlantic name.

The chief executive and chief financial officer of Flybe will transfer to the bidding consortium, according to documents published by the company.

Hosking Partners’ letter is said to enquire about any incentive payments due to either of the duo as a result of the consortium’s takeover.

In a statement, a Flybe spokesman said: “The board of Flybe was faced with a very tough decision based on Flybe’s current difficult liquidity position and the expectation that this pressure will continue.

“Obtaining the revised facility, as announced on 15 January, from the consortium provides the security that the business needs to continue to trade, which preserves the interests of its stakeholders, customers, employees, partners and pension members.

“Flybe will be responding directly to letters received from shareholders.”

Flybe launched a formal sale process last autumn, blaming a toxic cocktail of currency volatility, rising fuel costs and Brexit-related uncertainty.

Although it is small in financial terms, it remains one of the UK’s best-known airline brands, carrying thousands of passengers between largely second-tier British airports as well as European destinations.

A source close to the company pointed out that it had warned in the results accompanying the launch of its sale process that if its credit card partners “were to choose to seek significantly higher cash collateral and the group cannot access sufficient additional liquidity, this would give rise to a material uncertainty which may cast significant doubt about the group’s ability to continue as a going concern”.

The Takeover Panel declined to comment, although a source close to it said it was confident its supervision of the bid had been handled in accordance with its policy of acting in investors’ interests.

For Virgin Atlantic, still part-owned by Sir Richard Branson’s Virgin Group, control of Flybe’s regional network will provide a valuable feed into its long-haul flights to international destinations.

Its return to the domestic UK aviation market will come four years after it announced the closure of Little Red, its previous attempt to make money from a notoriously difficult sector.

Rising oil prices and the weakening of sterling have put airlines under intense pressure, with a deepening industry price war accentuating the financial squeeze.

A Hosking Partners spokesman declined to comment on the contents of its letter, but said this weekend that investors were “entitled to transparency over precisely what has gone on to drastically reduce Flybe’s value”.

“The auction undertaken under the formal sale process has clearly not yielded a favourable outcome for all stakeholders, and it seems that the outcome has locked out any other bidder who may be able to provide a better solution for all of Flybe’s stakeholder‎s.”

https://news.sky.com/story/top-flybe-shareholder-threatens-legal-challenge-over-2m-bid-11611470

Branson for Flybe?

“Virgin Atlantic Airways is in talks to acquire regional airline Flybe Group Plc (FLYB.L), Sky News reported on Thursday, a week after Flybe said it was in talks to sell itself.

A tie-up with Flybe would provide opportunities to feed passenger traffic into Virgin Atlantic’s long-haul network and access valuable take-off and landing slots at London Heathrow Airport, Sky News reported, citing unnamed sources.

Virgin Atlantic’s main business is UK-to-U.S. flights. The company is owned by Richard Branson’s Virgin Group and U.S. airline Delta Air Lines.

The report did not mention any financial details. Flybe has a market capitalization of about 21 million pounds, according to Refinitiv Eikon data.

Flybe and Virgin Atlantic declined to comment.

Flybe issued a profit warning in October citing weakening demand, higher fuel costs and a weaker British pound.

Sky News had previously reported that Stobart Group Ltd (STOB.L) was likely to be one of the potential suitors for Flybe.”

https://uk.reuters.com/article/uk-flybe-group-m-a-virgin-atlantic/virgin-atlantic-in-talks-to-buy-flybe-sky-news-idUKKCN1NR27Y

“Flybe calls in crisis experts as insolvency fears mount”

“Flybe has called in accountants from KPMG as the low-cost airline attempts to save itself from collapse.

Britain’s biggest regional airline sounded the alarm yesterday by putting itself up for sale. The announcement came as half-year profits plunged and the company’s auditor, PwC, warned of “significant doubt” over its future.

KPMG has been appointed to provide Flybe with advice on its cash flow. City sources said the Monarch Airlines administrator is the frontrunner to take on a potential insolvency. …”

https://www.telegraph.co.uk/business/2018/11/14/flybe-puts-sale-profits-plunge/

Council leaders pledge to help Flybe

Looks like we are going to need the Magic Money Tree … again.

“Council leaders in Devon have offered to work with Flybe to keep it in Exeter.

In an open letter to the struggling airline, they say the airport brings in £150m a year to the local economy and creates “high value local jobs” which they do not want to lose.

Flybe is in talks about a possible sale of the group weeks after warning over profits.

Two-thirds of passengers at Exeter Airport fly with Flybe.

The letter was signed by the leaders of Exeter City Council, East Devon District Council, Devon County Council, Exeter College and the Heart of the South West LEP.”

https://www.bbc.co.uk/news/live/uk-england-devon-46102129

Flybe puts itself up for sale

The airline employs around 1,000 people at Exeter airport and the Exeter and East Devon Growth Point relies heavily on the company’s HQ being in East Devon.

Here is the latest report of Exeter airport’s consultative committee in September 2018 was notable for unusually having no Flybe representative attending:

Click to access 1808_Consultative.pdf

“One of Exeter’s most important employers, Flybe, has put itself up for sale – partly because it’s been hit hard by Brexit-related uncertainty and currency fluctuations.

The move was announced to the stock market this morning.

Flybe, which employs around a thousand staff at its Devon HQ, was linked with Stobart earlier this year but no deal resulted.

The airline’s share price and profitability have struggled for years.”

https://www.bbc.co.uk/news/live/uk-england-devon-46102129