Flybe and Ryanair to create new airline
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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."
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."
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Flybe and Ryanair to create new airline
The present success of Ryanair is probably unquestionable and the company has a thirst to further develop but "commercial agreements" carry risks so always bear in mind the words of Julius Caesar:
"Yond Cassius has a lean and hungry look;
He thinks too much: such men are dangerous.".
Julius Caesar Act 1, scene 2, 190–195
"Yond Cassius has a lean and hungry look;
He thinks too much: such men are dangerous.".
Julius Caesar Act 1, scene 2, 190–195
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Great. Ryanair sets up a new airline, provides it with 43 routes €100m, 9 A320s, pilots, cabin crew and all required engineering and ground staff. This airline will then operate to a business plan designed by Ryanair. And MOL calls it competition?
Does anyone believe that it will be independent?
Does anyone believe that it will be independent?
Last edited by Tooloose; 6th Feb 2013 at 14:36.
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Lilliput is a fictional island supposed to be in Lough Ennell in Co. Westmeath just a field or two away from Gigginstown, home of Michael O'Leary. My suggestion for a name for this new airline would be 'Air Gullible'.
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Lilliput is a fictional island supposed to be in Lough Ennell in Co. Westmeath...
No, Lilliput exists. It's the area at the southwestern point of the lake, where the River Brosna exits. Jonathan Swift (Gulliver's Travels) had a country house there in 1726, hence the name.
Lough Ennell at Lilliput | Flickr - Photo Sharing!
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I think it would be more correct to say that FR and BE are offering that Flybe will set up an Irish subsidiary with the support of FR in exchange for an anti-trust clearance for FR's proposed takeover of EI.
That is quite different from "Flybe and Ryanair to create a new airline".
That is quite different from "Flybe and Ryanair to create a new airline".
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Someone in the PR dep working overtime again Squirrel?
You're burying so many nuts you can't keep track of them all these days
Thanks for making the connection between Gullible and a fairy tale.
You're burying so many nuts you can't keep track of them all these days
Thanks for making the connection between Gullible and a fairy tale.
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I can quite see what's in it from BE's point of view. They get a hundred and fifty million from FR in cool green in exchange for a one million "investment." Even if the new "airline" goes belly-up in short order, the break-up value will be a lot more than what they've put into it. Win-win situation for them.
But one would want to be more than usually credulous, however, to see this as meaningful "competition" to FR. Why would a far smaller outfit than the currently-existing EI, created as an all-too-evident Potemkin village by its giant parent, be expected to last more than a few years at best? And once it goes the way of all flesh, FR will then enjoy an effective monopoly over the Irish market, all for a mere hundred and fifty mill (slightly less than three months' net profits).
Got to give them credit for brass neck, though.
But one would want to be more than usually credulous, however, to see this as meaningful "competition" to FR. Why would a far smaller outfit than the currently-existing EI, created as an all-too-evident Potemkin village by its giant parent, be expected to last more than a few years at best? And once it goes the way of all flesh, FR will then enjoy an effective monopoly over the Irish market, all for a mere hundred and fifty mill (slightly less than three months' net profits).
Got to give them credit for brass neck, though.
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Lark: Personal knowledge. I used to fly-fish there, back in the day. Mind you, this was when Ennell was suffering from the worst eutrophication problem of any waterway in western Europe, when my time would as profitably have been employed flogging a wet runway.
I understand it's a bit better these days, as a result of the farmers on the Westmeath side no longer being allowed to spray liquid pigs**t on their fields within a defined radius of the Brosna.
I understand it's a bit better these days, as a result of the farmers on the Westmeath side no longer being allowed to spray liquid pigs**t on their fields within a defined radius of the Brosna.
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Just wondering if this deal is soooooooo good for Flybe Ireland.
Why wasn't Aer Lingus offter it and keep the two irish airline togeather in Ireland because MOL claims that Aer Lingus w'ont into the further and was it not better for every one involved that this would be done beside pumping up a loss making airline
Why wasn't Aer Lingus offter it and keep the two irish airline togeather in Ireland because MOL claims that Aer Lingus w'ont into the further and was it not better for every one involved that this would be done beside pumping up a loss making airline
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Whats the market cap of Flybe these days? Less than a 100m I would guess. AL has net cash of many times that. So buy 51% of Flybe or whatever it takes to get control and then the FR "remedies" package is dead in the water.
Shame though that it will waste more money getting rid of FR. In todays prelim results I think it was €10m spent this year alone defending the takeover. Probably not much change from €50m in total so far.
Shame though that it will waste more money getting rid of FR. In todays prelim results I think it was €10m spent this year alone defending the takeover. Probably not much change from €50m in total so far.
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Hope this doesn't come to fruition or more to the point that the authorities let MOL get his hands on EIN.
The mere idea that MOL has the Irish consumers best interests at heart is laughable. This is the guy who even tells his own customers where to go! I sincerely hope that the many people he has crossed over the years will be serving a bit of revenge on him and block him turning Ireland into Ryanair Island
Can you imagine what kind of position the Irish airports will be in when MOL is in charge of 95% of the country's traffic
The mere idea that MOL has the Irish consumers best interests at heart is laughable. This is the guy who even tells his own customers where to go! I sincerely hope that the many people he has crossed over the years will be serving a bit of revenge on him and block him turning Ireland into Ryanair Island
Can you imagine what kind of position the Irish airports will be in when MOL is in charge of 95% of the country's traffic
Rosedale Aviation Holdings (69%), I dont see them willing to sell.
I grant you however that even though 48.1% is technically a minority, it would be extremely difficult to mount any kind of takeover bid for Flybe without Rosedale's consent
Source - http://www.flybe.com/corporate/pdf/F...rt-2011.12.pdf
MCDU - current market capitalisation of Flybe with share price at 54 pence is £40.6m - yes, 40.6 million pounds
Last edited by davidjohnson6; 6th Feb 2013 at 21:11. Reason: 48.1% is a minority not a majority
Paxing All Over The World
On reading the thread title when it first appeared in the forum - before opening it - I thought: It's a bit early for April 1st. 
FR - you may be interested to know that Rosedale / Jack Walker Trust hold approx 48.1% of the shares as of 1st June 2012 and not 69%
I grant you however that even though 48.1% is technically a majority, it would be extremely difficult to mount any kind of takeover bid for Flybe without Rosedale's consent
I grant you however that even though 48.1% is technically a majority, it would be extremely difficult to mount any kind of takeover bid for Flybe without Rosedale's consent
