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Flybe-9

Old 25th Nov 2018, 20:08
  #1161 (permalink)  
 
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Originally Posted by Skipness One Foxtrot View Post

Fair point. It’s also backed to the hilt with taxpayers money, like NQY, and yet still flybe struggle. CWL’s problem is more easyJet at BRS than BA at the other end of the GWR.
Incentives were provided from the airport but that is no different than any other airport.
As for BRS yes that will always be a drain on Cardiff Airport (even if APD was devolved one day) but Flybe have shown that if the flights are provided then people will use them, around 480,000 passengers (CAA stats are the source) used Flybe from CWL in 2017 and because of that there has been more positivity around CWL than negativity lately, people who i know have always used BRS have started to use CWL as well and will do so in the future and that comes from having Flybe at the airport. That is why their survival and continued operations at CWL is extremely important for the airport.
I mentioned BA because IAG own them and they are essentially their UK airline and while yes Vueling provide flights to the sun, i'm sure IAG would prefer people like me who use city routes or travel long haul to use LHR.
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Old 25th Nov 2018, 20:18
  #1162 (permalink)  
 
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Lets look at it from another point of view... what if any buyer doesn't necessarily want Flybe, what if they only want to prevent their competition getting it?
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Old 25th Nov 2018, 20:33
  #1163 (permalink)  
 
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Originally Posted by Skipness One Foxtrot View Post

Fair point. It’s also backed to the hilt with taxpayers money, like NQY, and yet still flybe struggle. CWL’s problem is more easyJet at BRS than BA at the other end of the GWR.
'Backed to the hilt' is a tad disingenuous is it not? Flybe (not including franchisees) have one PSO (which any EU operator could apply to operate) out of the 150 or so routes they operate.

Good if it were true but personally, I doubt IAG's interest. However it may be valid to consider what risk a strengthened VS, aligned with AF-KLM may pose as a threat to the IAG stable of carriers. All those potential regional passengers that IAG might lose as a result of Flybe routing them via LHR/MAN onto VS, or via CDG and AMS on AF-KLM?

On the eve of LHR getting more capacity, just perhaps IAG could consider it to be a valid investment, after all who else is likely to provide regional connectivity to new points in the UK when a third runway gets built at LHR. BACF maybe, but not at the cost of a BE DH4 they won't, and not with crew and aircraft at mutiple UK regional bases.

Last edited by JobsaGoodun; 25th Nov 2018 at 20:49.
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Old 25th Nov 2018, 20:43
  #1164 (permalink)  
 
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Sale

Originally Posted by Copenhagen View Post


What value do you see in it for Virgin?

Whatever happens, the other UK regional carriers can pick up other profitable routes.
A question on that point, if a potential buyer wants to do due diligence what access to they get to the financials? Obviously there are the published accounts but do they get commercial sensitive information about bases/individual routes?

Just for a bit of information to give an idea of their current operation I have tried to note down the First wave of departures tomorrow morning and it makes interesting reading in parts. The usual disclaimers none more so than I can't say if it is definitive but I have used various public domain websites such as Jethro's for operational aircraft and FR24.

I found 57 departures and a maximum 75 aircraft in service (actually 69 left as I had included one DH8D not in sevice and included the Stobart 195's) of which one E175 has been at Exeter since 4 November, a Dash 8 at Exeter since 13-11 (PD), one since 18-11 (PI), one since 22-11 (OK), one at BHX since 22-11 (OR) and another at Exeter since 23-11 (DR). Up until 19.00 57 aircraft had moved today and around 3 or 4 extra yesterday. This is just Flybe mainline not Eastern or Blue Island flights or aircraft or the Stobart Southend operation.

This shows they have a lot of spare aircraft and do we know how many are owned and how many leased? This seems incredibly high even for winter which in terms of the BHX base is not particularly off-peak and in fact next week the base is back to 11 aircraft with Milan and Berlin going back to double daily on certain days for the first 3 weeks in December. Also noticeable that the jets all move regularly other than E175 "JI" which is clearly in maintenance.

For those debating what is in it for the airlines rumoured to be interested, these are tomorrow's flights - first wave only and I believe there are no overnighting mainline aircraft at Dublin, Inverness, Newcastle, Leeds, Liverpool, East Mids, Norwich, London City, Heathrow, Gatwick, Jersey, Guernsey, Amsterdam or Paris. Any additions and corrections most welcome. Formatting as usual on this site a nightmare.

Airport...….... Based Aircraft.....Time:Route…....Time:Route…....Time:Route…....Time:Route………..Time:Route
Aberdeen.........3..................…07:05 BHX...…….07:05 LHR...…..06:35 MAN...…..
Belfast City...…7...............…...07:00 BHX......…..07:15 EMA...….07:10 EDI...........07:20 GLA............06:40 LBA.
.........…........................……….
06:45 LCY...……..06:50 MAN
BHX...…........10..................….06:55 AMS...…….08:00 AMS...….07:35 BHD.........07:00 DUS...….....07:00 EDI.
...........................................….
07:00 GLA...…....07:15 JER...…..06:45 MXP.........06:40 CDG...…....07:20 STR......11th next week TXL 07:25
Cardiff......…...3.................……06:40 EDI.........…06:20 BHD.......07:00 DUB
Doncaster.......1......................06:50 DUB
Dusseldorf.....2.......................06:30 BHX.........…06:50 LCY
Edinburgh.......8..................….07:20 BHD...……..07:00 BHX...….07:20 EMA...…..06:35 LCY......…..07:05 LCY
..............................................
06:20 LHR..........06:35 MAN......06:40 SOU.
Exeter...……...5................…….07:10 JER.........….07:00 LCY......06:40 MAN.........07:25 AGP......…..06:30 CDG
Glasgow.........4..............……..06:50 BHX......…..07:05 EMA.......06:50 MAN...…..07:00 SOU
Manchester.....6.....
…...........….06:45 ABZ............06:55 AMS...….07:00 BHD........07.00 DUS.........06.10 CDG
..........................................….
06:50 CDG
Newquay...…..1........................07:25 NQY
Southampton..7........................07:00 AMS...…...07:00 BHD...….06:50 DUB.........07:00 EDI...……..06:45 MAN
............................................….
07:00 NCL...…...06:50 CDG
Total...……....57


Pete

Last edited by OltonPete; 26th Nov 2018 at 18:01. Reason: Add information about number of aircraft
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Old 25th Nov 2018, 21:36
  #1165 (permalink)  
 
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Originally Posted by OltonPete View Post
A question on that point, if a potential buyer wants to do due diligence what access to they get to the financials? Obviously there are the published accounts but do they get commercial sensitive information about bases/individual routes?
I have never done and M&A deal in the airline industry but in general, any serious buyer would always get access to detailed financials on the target company. The published accounts will hardly get a second look, the management accounts are the important thing.

Disclosure of commercially sensitive information is always quite a difficult area, especially when talking to a direct competitor so I doubt the detailed base/route data would be disclosed at this stage. But then again it depends on how bad the FlyBe financials are and how desperate the management are to sell.
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Old 25th Nov 2018, 22:41
  #1166 (permalink)  
 
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Backed to the hilt' is a tad disingenuous is it not? Flybe (not including franchisees) have one PSO (which any EU operator could apply to operate) out of the 150 or so routes they operate.
I meant CWL, like PIK is by the Scottish Government.
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Old 26th Nov 2018, 06:19
  #1167 (permalink)  
 
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Originally Posted by PDXCWL45 View Post
Incentives were provided from the airport but that is no different than any other airport.
As for BRS yes that will always be a drain on Cardiff Airport (even if APD was devolved one day) but Flybe have shown that if the flights are provided then people will use them, around 480,000 passengers (CAA stats are the source) used Flybe from CWL in 2017 and because of that there has been more positivity around CWL than negativity lately, people who i know have always used BRS have started to use CWL as well and will do so in the future and that comes from having Flybe at the airport. That is why their survival and continued operations at CWL is extremely important for the airport.
How many seats were available in 2017?

Flybe have much bigger fish to fry in other airports over CWL.
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Old 26th Nov 2018, 06:37
  #1168 (permalink)  
 
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Originally Posted by RogueOne View Post
Lets look at it from another point of view... what if any buyer doesn't necessarily want Flybe, what if they only want to prevent their competition getting it?
Plausible acquision strategy, as with any M&A strategy in any space. Goes with the territory.
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Old 26th Nov 2018, 06:38
  #1169 (permalink)  
 
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Originally Posted by caaardiff View Post
How many seats were available in 2017?

Flybe have much bigger fish to fry in other airports over CWL.
About 650,000 seats for the year roughly. 73% of the seats were sold which i think is in line with their average LF.
Yes they do have bigger fish to fry then little CWL but that doesn't take away how important they are to the airport. If they do pull out it'll be interesting to see what effect it has on the airport as a whole as i can't see them be replaced. For airports like EXT and SOU the effects would be even bigger as they too won't find a replacement airline.
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Old 26th Nov 2018, 07:05
  #1170 (permalink)  
 
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It seems like Flybe chose a strategy to differentiate away from Locos with smaller aircraft, thinner routes and a more premium, old style pricing structure. It didn't work. The Loco model is dominant and they now offer the benefits of the old model with ticket flexibility, bags included, even meals and middle seat free on some. Flybe made the wrong choice of commercial model, tied themselve into leases which meant they couldn't change model quickly and backed the wrong horse. Now a sale looms, if not, decline until a pre-pack adminstration can shake off all the leases and allow replacement by the ubiquitous 737/320. The airline business is now in the right hand side of the industry/poduct life cycle curve - lowest long run production costs, little innovation ad tending towards a utility (except utilities make money). The only way is lower and lower wages, automation and lowest seat/mile costs for the aircraft.
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Old 26th Nov 2018, 07:34
  #1171 (permalink)  
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Originally Posted by OltonPete View Post
A question on that point, if a potential buyer wants to do due diligence what access to they get to the financials? Obviously there are the published accounts but do they get commercial sensitive information about bases/individual routes ?
I have a bit of experience on M&A. Once a buyer has stated their interest and signed all the requisite NDAs, they will have access to everything including the annual bill for loo roll. In my view, the company will be segmented with the purchaser taking the choice cuts through a new company and leaving what it doesn't want for the creditors to fight over at pennies in the pound. The old Flybe could be made more efficient such as pooling the fuel futures but the huge disparity in spend and lack of commonality suggests that Big Virgin would see zero benefit. The lack of a third runway at EGLL and spare capacity at EGKK limits options to gather feeder traffic from regional and near continent departure points. Whether the interest is genuine remains to be seen.
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Old 26th Nov 2018, 08:50
  #1172 (permalink)  
 
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It seems like Flybe chose a strategy to differentiate away from Locos with smaller aircraft, thinner routes and a more premium, old style pricing structure. It didn't work.
They didn't really. Rather they tried to fly routes that would not support a 737/320. Yes you might be able to fly a couple of times a day between SOU or BHX and EDI with those bigger aircraft, but you couldn't offer business friendly frequency. The problem remains for flights from airports like EXT,SOU,BHX, EMA, NWI etc. Many people want to fly form these but not at business Eastern airways type prices- other folk will travel to BRS,STN,LGW to get a loco fare. I don't know if the niche I have explained which Flybe were trying to fill, is profitable in the new era.
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Old 26th Nov 2018, 09:29
  #1173 (permalink)  
 
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Looks like IAG are in
10.07 today
https://news.sky.com/story/flybe-boosted-by-report-of-ba-owner-interest-11564094
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Old 26th Nov 2018, 09:58
  #1174 (permalink)  
 
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Question for those in the know. I bought Flybe shares a while ago. If IAG buy Flybe what will happen to Flybe shares?
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Old 26th Nov 2018, 10:19
  #1175 (permalink)  
 
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Flybe shares will cease to exist.
You will be paid their value when the sale is finalised.
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Old 26th Nov 2018, 10:30
  #1176 (permalink)  
 
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Unhappy

Originally Posted by Navpi View Post
Great idea - and call it BA citiexpress or connect
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Old 26th Nov 2018, 10:51
  #1177 (permalink)  
 
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Originally Posted by Tinwald View Post
Great idea - and call it BA citiexpress or connect
Not necessarily? Afterall it is IAG that the reports are saying are interested NOT BA who are indeed of course a brand of the group. Realistically there would be no gain in rebranding the airline to anything BA. By doing so they would need to align the product to that of BA / Cityflyer, so not to have yet more variation and inconsistency service offering on BAs network. Things such as Club Europe would need to be offered, a product that could cost more than they make to offer on many of Flybe regional routes if even needed at all. It also increases costs and overheads.

The best bet would be to keep Flybe completely separate of any of the groups current branding just like all their other takeovers. Being prominently in the UK, it's understandable that they could potentially allign more with BA on some of the network by increasing code sharing and perhaps using the Flybe brand on some of their routes that would work better with a single class / low cost carrier e.g the Cityflyer regional summer routes but booked under the Flybe brand and service but using Cityflyers spare capacity at these tumes
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Old 26th Nov 2018, 11:20
  #1178 (permalink)  
 
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Originally Posted by Reversethrustset View Post
Question for those in the know. I bought Flybe shares a while ago. If IAG buy Flybe what will happen to Flybe shares?
Depends on the intent of whoever the acquiring company is. No doubt Flybe have or will undertake share buyback, reducing supply of their shares on the open market, therefore (hopefully) bolstering the share price (limit supply, to drive investor demand).

In terms of what may happen to your stock, well there's a few possible scenarios which may unfold:

The acuiring company might suggest to buy the Flybe shares at a premium offer price per share that will exceed current market pricing and that could help drive present stock holders to sell up their holdings in the stock. That may become lucrative for you depending on your original purchase price per share, and don't forget if you end up with a capital gain, you got CGT liability. You may not have the option to do a bed & breakfast transaction under present circumstances which ordinarily is a method to reduce your CGT liability. Watch that space!

A lot depends on the nature within which any acquiring company is preferring to execute the acquisition of Flybe. If it's a cash exchange, whoever is buying Flybe will buy at a proposed and agreed share price, and Flybe shares will be replaced with the cash.

Or, who knows but the acquiring company might offer to replace Flybe shares with shares of the company doing the acquisition. You might end up with some combibation of cash and stock offer but anything could happen in a M&A event.
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Old 26th Nov 2018, 11:32
  #1179 (permalink)  
 
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Originally Posted by proud_darcy View Post
how long between announcement of sale accepted by shareholders and the shares being nullified.
(I know we are still a long way from an offer and sale being agreed)
I doubt you'll have the cheque before this Christmas, if that's your driver
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Old 26th Nov 2018, 11:38
  #1180 (permalink)  
 
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Thanks for the info, mik3bravo, much appreciated.
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