Flybe and Ryanair to create new airline
An interetsing development this morning for Flybe particularly, is it wise for them to get involved with Ryanair?
From the Telegraph:
Flybe, the loss-making British airline, and Ryanair have agreed to create Flybe Ireland, if the Irish low-cost carrier's bid for rival Aer Lingus is successful.
Flybe said on Wednesday the two had reached agreement over the possible transfer of aircraft, staff and routes.
The deal is part of Ryanair's attempt to win approval from the European Commission for its third attempt to take over Aer Lingus. The airline needs to make concessions to ensure Irish air travel remains competitive.
Flybe said it would pay Ryanair €1m (£866,000) for the newly created airline.
The deal would see Ryanair transfer to Flybe Ireland 43 European routes, at least nine Airbus A320 aircraft and an undisclosed number of flight crew, engineers, management and facilities to operate the business.
The Irish low-cost carrier will also provide Flybe Ireland with a cash injection of €100m and forward sales cash and liabilities worth around €50m.
"The terms of the deal negotiated ensure that Flybe Ireland will be a well-capitalised, well-funded company, enabling us to deliver upon that strategic aim," said Flybe chief executive Jim French.
Flybe said the deal was would move the airline away from its reliance on UK revenue and Flybe Ireland would start with around €150m of cash on the balance sheet.
However, Mr French added: "Before Flybe Ireland can come into being there are many hurdles to overcome, not least the EC accepting the remedies offered by Ryanair in its offer to take over Aer Lingus, and then the shareholders of Aer Lingus accepting an offer from Ryanair."