Flybe rescued by Virgin Atlantic and Stobart consortium

Marco Green
January 11, 2019

The offer values the carrier at 1p a share, a 94 per cent discount to company's closing share price of 16.38p last night when it was valued at £35.6 million.

Lucien Farrell, partner of Cyrus, which helped Virgin sell its Virgin America arm to Alaska Airlines a year ago, added: "We believe Flybe's United Kingdom regional focus and high quality management, together with Virgin Atlantic's dedication to the best customer experience and Stobart Group's expertise in regional flying, will produce a world-class airline".

The consortium, which includes Stobart Group and Cyrus Capital Partners, will form a new airline group.

It will also provide a £20 million bridge loan to Flybe and £80 million of further funding to the combined group.

The news comes less than two months after the struggling airline put itself up for sale.

Flybe chief executive Christine Ourmieres-Widener said the firm had been forced to seek a buyer due to higher fuel costs, currency fluctuations and Brexit uncertainty.

"We have been affected by all of these factors which have put pressure on short-term financial performance", she said.

Based in Exeter, Flybe carries around eight million passengers a year from airports such as Southampton, Cardiff and Aberdeen, to the United Kingdom and Europe. At the same time, Flybe suffered from a number of legacy issues that are being addressed but are still adversely affecting cashflows. Easyjet, a rival in some of the regional routes Flybe operates, had been seen as a contender, after Stobart Group walked away from a bid for the airline in March.

The suitors said they would "secure the long-term future of Flybe, to the benefit of local communities, customers and its people".

"In the near future, this will only increase, through our expanded joint venture partnership with Air France-KLM".

Warwick Brady, chief executive of Stobart Group, said it would also be an opportunity to expand passenger numbers at Southend airport, which it owns, along with Carlisle airport.

Other reports by Click Lancashire

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