Intentions with respect to the Flybe Group business
Connect Airways intends to focus on three principal areas, in relation to the business of the Flybe Group:
• simplifying and focusing on improving the performance of Flybe Limited’s core network whilst recognising the importance of regional connectivity;
• adjusting Flybe Limited’s network to improve connectivity with Virgin Atlantic’s long-haul network, particularly at London Heathrow Airport and Manchester Airport, bringing more choice to customers; and
• operating the Combined Group as an independent company, and optimising the combined commercial, operational and functional expertise and scale of Virgin Atlantic and the Stobart Group.
Optimising the Network and Improving Connectivity
Connect Airways plans to optimise Flybe Limited’s network and operations to focus on key routes with the aim of continuing to enhance regional connectivity across the UK and Ireland.
Connect Airways also intends to bring benefits for customers through linking an enhanced Flybe regional network with Virgin Atlantic’s long-haul operations particularly at Manchester Airport and London Heathrow Airport.
Rebranding
All flying operations except Stobart Air will operate under a Virgin brand to the extent possible. This will be timed to coincide with a refurbishment programme for Flybe Limited’s fleet to provide a seamless customer experience in keeping with Virgin Atlantic’s heritage.
There will be no change to the brands under which Stobart Air flies today which will continue to be maintained and operated separately.
Interim funding
Concurrently with announcing the Acquisition, the Connect Lenders made available a £20 million secured bridge loan facility to support Flybe Limited’s ongoing working capital and operational requirements. Concurrently with the entering into of the Subsidiary Sale SPA, this bridge loan facility was amended and £10 million of the revised £20 million secured facility was immediately utilised by Flybe Limited (with an additional £5 million being utilised on 25 January 2019).
Directors
Upon completion of the Acquisition, the Non-Executive Directors will be asked to resign from the Board and will be replaced by directors appointed by Connect Airways.
Whilst very limited discussions have taken place, Connect Airways has made no decision as to whether it would be appropriate to put in place management incentivisation arrangements and, if so, the form such arrangements may take. It is Connect Airways intention to consider this only once the Acquisition has completed.
Leveraging the expertise of Flybe, Stobart Group and Virgin Atlantic
Through the combination of Flybe and Stobart Air, and partnering with Virgin Atlantic, Connect Airways intends to continue as an independent operating carrier with a separate UK AOC under the Virgin Atlantic brand. Stobart Air is intended to continue under a separate Irish Air Operator Certificate with its franchise and aircraft leasing operations as exists today.