Stobart Group "in the frame" to buy Flybe airline

Marco Green
November 15, 2018

Flybe's stock soared by as much as 39% in early trading after it said it was "in discussions with a number of strategic operators about a potential sale of the company", confirming a move first reported by Sky News.

Flybe said the decision to put itself up for sale comes amid a range of options being considered as it battles against challenging conditions in the airline industry.

Earlier this year a potential sale of the airline to the Stobart Group fell through when a bid was rejected.

Reporting Flybe's interim results, auditors PwC also warned that there was "significant doubt about the Group's ability to continue as a going concern", due to uncertainty surrounding credit card acquirers demanding higher cash collateral.

But Stobart, which already has a franchise agreement with Flybe, could reportedly come back into the frame.

Basic earnings per share dropped by more than half to 3.5p, and Flybe said it will not pay a dividend.

The group has 78 planes and serves around eight million customers a year.

Profits sank 54 per cent year on year to £7.4m for the six months to the end of September, down from £16.1m, as Flybe paid "onerous" aircraft loans for nine leased Embraer 195 jets it plans to return in 2020.

Passenger numbers edged 0.6 per cent higher to 5.2 million.

"Stronger cost discipline is starting to have a positive impact across the business, but we aim to do more in the coming months, particularly against the headwinds of currency and fuel costs", she said at the time.

Chief executive Christine Ourmieres-Widener said the group continued to see improvements in the third quarter and added that cost savings had already helped to drive progress in boosting profits.

Flybe is now reviewing its business in terms of cash management, cost savings and capacity reduction.

Other reports by Click Lancashire

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