Flybe's LHR slots
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Flybe's LHR slots
Sunday Times 18 Jan 2004
From within the BA story;
....."Meanwhile,Qantas and Virgin Atlantic are close to paying a record sum for Heathrow runway slots in a deal with Flybe, the airline owned by a family trust of the late owner of Blackburn Rovers football club ,Jack Walker.
Flybe is selling six pairs of slots,which it currently uses to run services on behalf of Air France.Qantas,the Australian flag carrier,is understood to have agreed to pay close to £20m for two pairs, while Virgin Atlantic is thought to have offered a similar sum for the remaining four pairs.The deals are expected to be finalised this week....Insiders claimed Virgin Atlantic had paid £24m for the four pairs of Flybe slots,but sources at the airline said the figure was too high.Industry sources said the trades set a new valuation benchmark....The previous highest price at Heathrow was paid last year by BA.It bid £12m for two pairs of slots,buying them in an internet auction staged by United Airlines,the American carrier."
Personally I think this could make a very nice downpayment on a few nice new NG737's or a few A319's. It certainly gives Flybe the opportunity to renew their fleet in order to better compete with the other low cost airlines, particularly their routes into Spain.
If nothing else it will give the airline some cash which it will need to see it through the next few years.
From within the BA story;
....."Meanwhile,Qantas and Virgin Atlantic are close to paying a record sum for Heathrow runway slots in a deal with Flybe, the airline owned by a family trust of the late owner of Blackburn Rovers football club ,Jack Walker.
Flybe is selling six pairs of slots,which it currently uses to run services on behalf of Air France.Qantas,the Australian flag carrier,is understood to have agreed to pay close to £20m for two pairs, while Virgin Atlantic is thought to have offered a similar sum for the remaining four pairs.The deals are expected to be finalised this week....Insiders claimed Virgin Atlantic had paid £24m for the four pairs of Flybe slots,but sources at the airline said the figure was too high.Industry sources said the trades set a new valuation benchmark....The previous highest price at Heathrow was paid last year by BA.It bid £12m for two pairs of slots,buying them in an internet auction staged by United Airlines,the American carrier."
Personally I think this could make a very nice downpayment on a few nice new NG737's or a few A319's. It certainly gives Flybe the opportunity to renew their fleet in order to better compete with the other low cost airlines, particularly their routes into Spain.
If nothing else it will give the airline some cash which it will need to see it through the next few years.
Last edited by JobsaGoodun; 19th Jan 2004 at 04:54.
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It seems crazy to me, when they are supposedly looking to sell the airline, to start asset stripping it in this way. Without the LHR slots and other slots perhaps which maybe worth something - what exactly would a purchaser be buying? given that the company makes no money and is unlikely to inthe near future?
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Carlos - very true, however I did say about it being a downpayment.
It is well known that Flybe are courting, and indeed have many venture capitalists interested in the company as it stands. Flybe did make money last year on paper albeit a very small amount. It is forecasting a £2.5million profit this coming financial year with passenger figures approaching 6million.
There is no point whatsoever in marketing and trying to sell the company to investors as a low cost airline that has a few slots at LHR. The two simply do not go together!
Since it's change Flybe has consistently marketed itself as a 'low fare airline for the regions' and as such is wanting to avoid the likes of LHR as this does not fit in with its business philosophy or plan.
The last thing an investor wants is to be looking at a company that does not know what it is......mainstream carrier operating high yield routes from LHR....or low fare airline for the regions.
It is well known that Flybe are courting, and indeed have many venture capitalists interested in the company as it stands. Flybe did make money last year on paper albeit a very small amount. It is forecasting a £2.5million profit this coming financial year with passenger figures approaching 6million.
There is no point whatsoever in marketing and trying to sell the company to investors as a low cost airline that has a few slots at LHR. The two simply do not go together!
Since it's change Flybe has consistently marketed itself as a 'low fare airline for the regions' and as such is wanting to avoid the likes of LHR as this does not fit in with its business philosophy or plan.
The last thing an investor wants is to be looking at a company that does not know what it is......mainstream carrier operating high yield routes from LHR....or low fare airline for the regions.
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Flybe will NEVER be a low cost airline - and if investors were looking to buy a low cost, they would be better starting from scratch than inheriting the myriad problems and confusions of flybe.
Any VC who is buying would be looking to leverage debt against something, in the absence of profits, slots would do. Absent the slots, it makes it more difficult for an institutional investor to even start looking at it properly.
Any VC who is buying would be looking to leverage debt against something, in the absence of profits, slots would do. Absent the slots, it makes it more difficult for an institutional investor to even start looking at it properly.
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Maybe FlyBe will continue flying these slots forthe time being as BA already has slots that it is not using due to lack of crews. Before Xmas it was looking for an operator to fulfill the slots.
Have to agree thet Flybe have a strange fleet of a/c for an outfit that wants to be LC.
Have to agree thet Flybe have a strange fleet of a/c for an outfit that wants to be LC.
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£44 million for a handful of slots - and I thought the aviation community were in a financial crisis, with staff being laid off, fleet cutbacks, re-organisations, etc etc. I guess that doesn't apply to everyone then ?
Is it a cash payment ?
Is it a cash payment ?
