Flybe sold for 1p per share
A Virgin-led consortium has reached a deal to buy loss-making regional airline Flybe for £2.8 million, having beaten off a higher bid from a US carrier.
The successful offer from Connect Airways, a consortium which also includes the owner of Southend Airport, Stobart Group, and US equity firm Cyrus Capital, will see investors in the airline receive just 1p per share.
The rival offer from a consortium consisting of US-based Mesa Air and former Stobart boss Andrew Tinkler valued the airline at 4.5p per share. However, under the Connect deal, a further £100 million will be made available to the airline.
On Twitter, Flybe said the deal secured ‘an exciting future’ for its customers and employees, adding that it would continue to provide ‘vital regional connectivity’. The sale was confirmed just days after the collapse of another UK regional airline, Flybmi, which ceased flying on Sunday.
As part of the deal, Flybe will be rebranded and its flights will be timed to pump more passengers into Virgin Atlantic’s long-haul flights at Manchester and Heathrow. Heathrow boss John Holland-Kaye said today that the deal would allow Virgin to create a viable hub at London’s premier airport, competing with British Airways.
Flybe’s two operating subsidiaries, Flybe Ltd and Flybe .com are included in the sale to Connect Airways, which now owns all of the carrier’s assets and operations. Flybe flights will continue to operate as normal, said the company, but the Flybe Group is now a non-trading entity with no material assets other than the limited cash received, which will be used to cover transaction, residual and rundown costs of the company.
"It is not anticipated that after meeting these costs there would be any remaining funds available for distribution to shareholders," Flybe said in a statement to the London Stock Exchange.
It is recommending that shareholders accept a separate cash offer from Connect Airways of 1p per share. The offer will be put forward at a general meeting on March 4. If the shareholders decline the offer, Flybe said it would take steps to wind up the company
As the sale of Flybe to Connect Airways was announced on Thursday evening, it emerged a Flybe pilot who called the airline’s chief executive ‘incompetent’ has been suspended. The unnamed pilot sent an email to staff which was read out to CEO Christine Ourmieres-Widener on BBC Radio 4 earlier this month.
Flybe said the pilot was suspended on January 17, weeks before the email was made public, but declined to say what the pilot was suspended for.
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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