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Flybe-9

Old 23rd Feb 2020, 08:28
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VHF4 is correct. It will collapse if the owners wish it to do so. Unfortunately, it looks look like they want it to fail, strip assets and start again. Arguably, the cheapest option for them. The line of 'if flybe did not exist, you would have to invent it. Yes, it may well be re-invented into a profitable operation but not in its present form. Easyjet, Ryanair, Eastern Airways and Loganair to name a few could easily pick up the bread and butter routes at very short notice. I think the government is having second thoughts as they have sent in consultants who will undoubtably say that flybe has burnt through hundreds of millions of pounds in a short space of time and any loan will probably never get paid back. If and when it goes under the government will most likely be blamed for letting it fail. But i am sure we all feel here its the shockingly poor running of the company and the lack of sane strategy that have given it a death by a thousand cuts.
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Old 23rd Feb 2020, 08:37
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It will collapse if the owners wish it to do so. Unfortunately, it looks look like they want it to fail, strip assets and start again.
So why go through the whole "Connect" saga? They could have done this before - what has changed?
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Old 23rd Feb 2020, 10:00
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Why would the likes of Easyjet and Ryanair replace the lost capacity? More demand for their flights means they can charge more and make more profit. And where would they get the extra aircraft from that they'll need? As for Eastern and Loganair the former isn't in actually in great shape and where would the latter get the aircraft needed to expand even just to takeover the Scottish routes?
I do think that if Flybe go under so does the bulk of their route network. Which i why I hope someone will get on with it and stump up the cash required to keep them going.
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Old 23rd Feb 2020, 10:07
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Originally Posted by bean
From 2007!!!!!


https://www.aeroinside.com/incidents/airline/flybe

Looking at this it would Appear that engine failures are almost as common as landing gear failures...
Good job they employ some top-class pilots.....
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Old 23rd Feb 2020, 10:18
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PDX

8 million potential passengers and cherry pick the routes. so ryanair and easy will look to see what it profitable. And lets be honest, some routes would be.Thats why other airlines can step in. The original consortium may be now looking at the business model and think it cannot work in its present form. If I am wrong, why have they been posting huge losses and burning through hundreds of millions of pounds. I have been told Eastern have just leased two 190's. So easily and at short notice can get aircraft as these are already on their AOC. Why go through the connect saga? may have seemed a good prospect at the time but obviously not now.
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Old 23rd Feb 2020, 10:24
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Originally Posted by cabsav
8 million potential passengers and cherry pick the routes. so ryanair and easy will look to see what it profitable. And lets be honest, some routes would be.Thats why other airlines can step in. The original consortium may be now looking at the business model and think it cannot work in its present form. If I am wrong, why have they been posting huge losses and burning through hundreds of millions of pounds. I have been told Eastern have just leased two 190's. So easily and at short notice can get aircraft as these are already on their AOC. Why go through the connect saga? may have seemed a good prospect at the time but obviously not now.
As you say it may well appeared to have been a good move at the time but with the benefit of 20/20hindsight i think the owners have realised they have made a very big miscalculation and need to cut their losses PDQ
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Old 23rd Feb 2020, 10:28
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So what is the actual issue with Flybe? Is it riddle with debt like Thomas Cook was or is it simply operating a business model that is unprofitable? If it's debt, then surely Connect would've had sight of this before hand? If it's outright unprofitable then why get involved in the first place? If it could be profitable but needs to chop the fat, why are they so reluctant to invest and start making changes and why is the government having second thoughts all of a sudden?
Stobart are still heavily involved in this, so if Flybe were to go under, could they not just do what Loganair did with BMI and transfer the aircraft they want, continue as normal in terms of flights but start again in terms of HQ staff, crews etc etc on their own terms?
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Old 23rd Feb 2020, 11:04
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Originally Posted by PDXCWL45
Why would the likes of Easyjet and Ry anair replace the lost capacity? More demand for their flights means they can charge more and make more profit. And where would they get the extra aircraft from that they'll need? As for Eastern and Loganair the former isn't in actually in great shape and where would the latter get the aircraft needed to expand even just to takeover the Scottish routes?
I do think that if Flybe go under so does the bulk of their route network. Which i why I hope someone will get on with it and stump up the cash required to keep them going.
You are being slightly naive if you don’t think that EZY/RYR would not want to cherry pick a core handful of the most profitable routes. These airlines have built their business models on being opportunistic over the years and I’m certain they could readjust their networks to fly W patterns on said routes at fairly short notice if the money stacks up!
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Old 23rd Feb 2020, 11:06
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Originally Posted by caaardiff
So what is the actual issue with Flybe? Is it riddle with debt like Thomas Cook was or is it simply operating a business model that is unprofitable? If it's debt, then surely Connect would've had sight of this before hand? If it's outright unprofitable then why get involved in the first place? If it could be profitable but needs to chop the fat, why are they so reluctant to invest and start making changes and why is the government having second thoughts all of a sudden?
Stobart are still heavily involved in this, so if Flybe were to go under, could they not just do what Loganair did with BMI and transfer the aircraft they want, continue as normal in terms of flights but start again in terms of HQ staff, crews etc etc on their own terms?
I would imagine if and when Flybe do go bust Stobart would want to keep their SEN ATR ops going so would probably use the Virgin/Connect booking engine, they may even have a few Q400s transferred to them for their new routes starting this year from GLA, EDI and BHD to SEN if indeed these routes ever start but who knows, there are so many ifs and buts going on at the present time.

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Old 23rd Feb 2020, 11:08
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I think the problem is the new team at the treasury are taking a far more hard nosed view than did their predecessors who appeared to jump in feet first without much analysis of flybes long term survival odds or whether a government should be baling out a airline who’s owners have very deep pockets and hardly deserve aid from the tax payer

It appears the new lot are delving fairly deeply into the business which TBH can’t be a good thing from the owners view ...... Who i feel are basically trying to scam UK PLC out of a lot of cash .
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Old 23rd Feb 2020, 11:18
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Originally Posted by stewyb
You are being slightly naive if you donít think that EZY/RYR would not want to cherry pick a core handful of the most profitable routes. These airlines have built their business models on being opportunistic over the years and Iím certain they could readjust their networks to fly W patterns on said routes at fairly short notice if the money stacks up!
No I don't think I'm being naive. I think that the vast majority of Flybes network wouldn't be of interest to them. If it was why aren't they operating routes like that now? If you look at Ryanair especially it's almost withdrawn from the UK domestic market and Easyjet tends to only operate on the big trunk routes. Ie Scotland to London or Belfast to the bigger regional airports. They may add some extra seats here and there but I'd be surprised if they starting launching routes like Edinburgh to Exeter or Manchester to Southampton.
I do hope that we never have to find out whether I'm being naive or not!
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Old 23rd Feb 2020, 12:27
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I think the problem is the new team at the treasury are taking a far more hard nosed view than did their predecessors
Not sure I follow the logic - I thought Sajid Javid resigned because his advisers got sacked, so the new team is from No 10 who supposedly supported the bail out?

Why haven't easy and RYR already cherry picked the profitable routes? What's stopping them?
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Old 23rd Feb 2020, 12:35
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Originally Posted by SWBKCB
Why haven't easy and RYR already cherry picked the profitable routes? What's stopping them?
Easyjet have already put Birmingham-Glasgow and Birmingham-Edinburgh on sale. Birmingham to Amsterdam, Dusseldorf and Paris are probably being considered carefully

There is a large body of competition law which make various dubious practices illegal - eg price dumping, and imposes hefty penalties. The likes of Easyjet will be aware of this and want to make very sure they don't cause competition regulators to want to start asking questions. Any kind of public probe by competition aithorities can eat up huge amounts of management time, distracting them from strategic growth, cost millions, and create a damaging public image. It is therefore very important that if Easyjet do launch on Flybe routes, that they be able to prove very easily that they were not flying unprofitably so as to push Flybe out of business, and that there should be no uncertainty in a competition regulator's mind that they might have been doing this

It's also likely that Easyjet know they cannot compete with Flybe on frequency on business-centric routes, so will only want to launch when it really looks like Flybe won't be around for much longer.

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Old 23rd Feb 2020, 13:31
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Originally Posted by caaardiff
So what is the actual issue with Flybe? Is it riddle with debt like Thomas Cook was or is it simply operating a business model that is unprofitable? If it's debt, then surely Connect would've had sight of this before hand? If it's outright unprofitable then why get involved in the first place? If it could be profitable but needs to chop the fat, why are they so reluctant to invest and start making changes and why is the government having second thoughts all of a sudden?
Stobart are still heavily involved in this, so if Flybe were to go under, could they not just do what Loganair did with BMI and transfer the aircraft they want, continue as normal in terms of flights but start again in terms of HQ staff, crews etc etc on their own terms?
The legality of the BMI saga is currently under question. Particular how Loganair took on ex-BMI crew on brand new contracts, and not TUPE. It has been in an employment tribunal a few weeks ago, and the judge is yet to make a ruling. Perhaps if the judge rules favourably, flyBe may have a similar trick up their sleeves.
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Old 23rd Feb 2020, 17:19
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Itís very possible the owners are trying their hand and if the government doesnít come up the goods they will simply plough their own funds in , They have everything to gain and nothing to lose .
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Old 23rd Feb 2020, 19:18
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Originally Posted by fernlee
Itís very possible the owners are trying their hand and if the government doesnít come up the goods they will simply plough their own funds in , They have everything to gain and nothing to lose .
err....., they could lose their funds
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Old 23rd Feb 2020, 21:07
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Originally Posted by davidjohnson6
Easyjet have already put Birmingham-Glasgow and Birmingham-Edinburgh on sale. Birmingham to Amsterdam, Dusseldorf and Paris are probably being considered carefully

There is a large body of competition law which make various dubious practices illegal - eg price dumping, and imposes hefty penalties. The likes of Easyjet will be aware of this and want to make very sure they don't cause competition regulators to want to start asking questions. Any kind of public probe by competition aithorities can eat up huge amounts of management time, distracting them from strategic growth, cost millions, and create a damaging public image. It is therefore very important that if Easyjet do launch on Flybe routes, that they be able to prove very easily that they were not flying unprofitably so as to push Flybe out of business, and that there should be no uncertainty in a competition regulator's mind that they might have been doing this

It's also likely that Easyjet know they cannot compete with Flybe on frequency on business-centric routes, so will only want to launch when it really looks like Flybe won't be around for much longer.
Are B'ham and Man to Paris flybe routes or are they on contract to Air France?
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Old 23rd Feb 2020, 21:50
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BHX & MAN CDG & AMS

Originally Posted by anothertyke
Are B'ham and Man to Paris flybe routes or are they on contract to Air France?
Believed to be Flybe routes although I am not privy to the precise agreement between AF and Flybe (no agreement originally with KLM as far as I know) although it is rumoured that Air France want the majority of the services on Jets.

The major change was when Connect bought Flybe and the EU ruled that the BHX- AMS and CDG were in effect now monopolies and that anyone could take the 5 slot pairs off Flybe on Amsterdam and 3 slot pairs on BHX - CDG if they wanted them.

Something happened but nobody has explained what but Flybe dropped BHX - AMS to 4 daily from 5 this summer and Air France move the first CDG - BHX inbound to 10.25 just 10 minutes after Flybe and it was expected that another airline had shown interest in at least one slot pair on both routes. The rumour was that easyjet considered them but the slot timings were that of Flybe which are BHX based slots and easyjet of course don't have a base at BHX.

It has now ended up a total mess on BHX - CDG as AF have moved their first inbound to 10.25 and outbound to 11,10 leaving BHX woefully short of early morning outbound seats and anyone arriving CDG long-haul at 6am has to wait 4 hours to connect to BHX..

Also last year the 195 operated at least 2 of the 3 CDG's and of course they only will have the 88 seat 175 this summer and AF have left two of the 3 services as HOP despite load factors of 80-90% last summer.

Flybe also quietly added back the 5 daily Amsterdam rotation again indicating another airline might have changed their mind.

The net result on Amsterdam is little change with 5 KLM and 5 Flybe at decent times but CDG is a total and utter disaster offering 88 seats outbound between 6am and 11am - pathetic.

Pete
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Old 24th Feb 2020, 07:10
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The net result on Amsterdam is little change with 5 KLM and 5 Flybe at decent times but CDG is a total and utter disaster offering 88 seats outbound between 6am and 11am - pathetic.
Looking on the bright side, from a Flybe perspective yield on those 88 seats must be astronomical. At least they'll be making of profit on that service (provided, of course that they aren't taken up with passengers interlining on AF!).
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Old 24th Feb 2020, 08:49
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Originally Posted by Albert Hall
Clause 1.3.7 on page 178 of that document. The Slot Release Agreement contains a perpetual restriction on sale or transfer.

These slots are leasehold and not freehold, to use a property analogy. After three years you can make some changes to the leasehold property by redecorating without the landlordís permission but you never own the freehold.

Also bear in mind that Virgin Atlantic itself had operated two of the three years with Little Red. If it was within a year of winning the jackpot of Heathrow slots as you suggest, it is highly unlikely to have thrown in the towel with that prize so close by.
Thanks for this! I hadn't seen that clause. (To be lawyerly for a moment: I don't think we know what's in the actual Slot Release Agreement, but the clause you cite gave IAG the right to write that prohibition into the Slot Release Agreement, so they may very well have done so.) If an LHR slots jackpot is not on the agenda, then the whole saga is even more confusing to me...
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