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Flybe-9

Old 12th Jan 2019, 19:15
  #1381 (permalink)  
 
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Old 12th Jan 2019, 21:35
  #1382 (permalink)  
 
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Originally Posted by 22/04 View Post
Except that I am not sure what that business model was. Was it "to profitably fly smaller aeroplanes on routes (or on routes that require more frequency) that cannot be flown profitably by airlines who operate bigger aeroplanes." That is reasonable but they couldn't do it profitably. And then we have had

"To fly aeroplanes we shouldn't have on routes because no one will take them off our hands"

"To try to replace our franchise partners on routes they know so much better than us"

Any one got a better idea of what they were trying to do.
Good summary and in truth nobody has an idea.

Which gets to next question.

What exactly are new owners going to do to drive profitability, over something that has been shown by both BA Connect and Flybe not to work. Slash and burn is the only option with a high % of the portfolio of routes.
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Old 12th Jan 2019, 22:02
  #1383 (permalink)  
 
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The fact that credit card payments were being withheld would have been common knowledge in the investment industry. As I said previously, it is efficient, news is out in seconds. But they still valued the shares at 12p. They closed yesterday about 3.5p. Who arrived at the 1p valuation/offer? I have read The Times article. One processing company had started to hold back more than normal.
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Old 12th Jan 2019, 22:17
  #1384 (permalink)  
 
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Originally Posted by racedo View Post
Good summary and in truth nobody has an idea.

Which gets to next question.

What exactly are new owners going to do to drive profitability, over something that has been shown by both BA Connect and Flybe not to work. Slash and burn is the only option with a high % of the portfolio of routes.
Costs will be increased to provide Virgin service standards and pay fees for using the Virgin name. Anything that doesnít feed Virgin or contribute to the growth of SEN must surely be at risk.
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Old 12th Jan 2019, 22:25
  #1385 (permalink)  
 
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Originally Posted by True Blue View Post
The fact that credit card payments were being withheld would have been common knowledge in the investment industry. As I said previously, it is efficient, news is out in seconds. But they still valued the shares at 12p. They closed yesterday about 3.5p. Who arrived at the 1p valuation/offer? I have read The Times article. One processing company had started to hold back more than normal.
Well the shareholders can reject the 1p offer if they wish but clearly the directors donít think it is possible to carry on as an independent company. Andrew Tinkler must have paid more than 1p per share for his 10% stake and so wonít be very keen to sell.
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Old 13th Jan 2019, 05:29
  #1386 (permalink)  
 
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Originally Posted by runway30 View Post


Costs will be increased to provide Virgin service standards and pay fees for using the Virgin name. Anything that doesnít feed Virgin or contribute to the growth of SEN must surely be at risk.
I personally doubt they'll go from the buy onboard model to full service and feeding Virgin will be very limited as at Heathrow they can't get the slots and at MAN they aren't that large ( Virgin that is) though they could in the long term build MAN up especially if they looked at the A321NEOLR for secondary cities. Personally I think Flybe will continue much as they are but a bit more streamlined. As for SEN well what are they going to introduce that won't effect LCY or Ryanair?
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Old 13th Jan 2019, 09:19
  #1387 (permalink)  
 
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Originally Posted by runway30 View Post


Costs will be increased to provide Virgin service standards and pay fees for using the Virgin name. Anything that doesnít feed Virgin or contribute to the growth of SEN must surely be at risk.
There will be a training element to the virgin customer service standards, that will simply replace the current BE training. BE rarely get criticised for their customer service, more so their operational performance.
Costs will be saved by transferring to current VS call centres and streamlining the whole process. Feeder Airlines are often marginal but provide much needed feed to the parent airline. That's why keeping the profitable domestic and european routes that don't feed into the hubs will boost financial performance.
If VS uses this as an opportunity to expand from MAN it will likely mainly be USA routes, which normally depart before lunchtime. That means anyone connecting onto those flights will need to arrive in MAN between say 0800-1000, if not earlier. With the US arrivals being between say 0500-0800, pretty much only one bank of flights being needed, so say any feeder flights arriving and departing between 0900-1000. It depends how VS can work the long haul arrival and departure times. They will need to do something with the aircraft the rest of the day. VS have shrunk their Asia and Africa flights from LHR over recent years so its unlikely to see any from MAN in the immediate future. Most feeder Airlines feed into big hugs with short haul and long haul flights throughout the world, operating all day long. AF/KL, BA, LH, IB. VS don't have short haul to feed into or with the exception if some LHR flights, hardly any in the afternoon from other bases.
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Old 13th Jan 2019, 09:52
  #1388 (permalink)  
 
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Personally if this deal does go ahead, and at the moment its more 50/50. I would expect Christine to resign immediately afterwards, she has dragged an airline which Saad had spent 3 years grappling to get the finances back in order, and just thrown everything across the office. Hopefully this will be her last job in aviation as her track record is poor.

If it does go through, I think the Flybe name will be around for only 18 months as Virgin will quickly want to get rid. Hopefully the Q400s and current E175 will all get interior refreshes, the state of the seats to say the least is appalling. The only questions I have is whether FAS will stay as it currently is in Exeter, its a profitable part of the Flybe Group, but its whether Virgin want another engineering base/training centre in a part of the country it doesn't serve much.

Someone did raise the idea of the 5 ATR72s transferring to Stobart's side, would the even be allowed legally on the contract Flybe signed? Or since its a new company would that contract be void?
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Old 13th Jan 2019, 10:00
  #1389 (permalink)  
 
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It isn’t like Virgin Atlantic gets no feed at all. They do have the ‘Worldwide by EasyJet’ deal at Gatwick, which the general scheme is expanding, and wouldn’t be surprising if one day ended up at Manchester.

The question for expansion is how that will be facilitated. More aircraft for VS LH, or more flying by DL allowing VS aircraft to be freed up to fly from MAN?
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Old 13th Jan 2019, 10:49
  #1390 (permalink)  
 
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Originally Posted by racedo View Post
Nobody undertakes a rescue in business unless there is a massive and substantial financial return for doing so.
Heathrow and Gatwick slots? Though I heard a rumour FlyBE sold their Gatwick slots in the last few weeks for £4m.
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Old 13th Jan 2019, 10:56
  #1391 (permalink)  
 
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Originally Posted by Blackfriar View Post
Heathrow and Gatwick slots? Though I heard a rumour FlyBE sold their Gatwick slots in the last few weeks for £4m.
Not a rumour - see post 1345 above
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Old 13th Jan 2019, 11:21
  #1392 (permalink)  
 
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Originally Posted by EI-BUD View Post
Which ever way this goes, my guys is significant pruning of the network will take place. Consider, similar to some AF CDG routes operated in cooperation with BE, BE does the morning flights, meaning AF don't need a night stop.

Apply that to KL and AF across the UK, you've plenty of use for the fleet, and then feeding Virgin at MAN and LHR, maybe even rebrand Virgin Regional, or Virgin Lite ....
you can prune the routes but if you can't drop the airframe leases, you are stuck with the cost. If Flybe had gone bust the leases would have died, but as it has been bought, every liability continues. Maybe there was a restructuring plan in place that needs some money to tide the business over, but given the incompetence of Flybe management over the years that seems unlikely.
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Old 13th Jan 2019, 12:59
  #1393 (permalink)  
 
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I think those of you who think that this will just be flybe with Virgin branding or don’t believe that everything could change from route network to aircraft will be sadly mistaken.
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Old 13th Jan 2019, 13:12
  #1394 (permalink)  
 
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Originally Posted by runway30 View Post
I think those of you who think that this will just be flybe with Virgin branding or donít believe that everything could change from route network to aircraft will be sadly mistaken.
In that case, why buy them and not just wait?
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Old 13th Jan 2019, 13:22
  #1395 (permalink)  
 
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Slots and continuity perhaps. No need to build from ground upwards, just utilise whats in place, and then trim and/or develop accordingly routes to fit future plans.
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Old 13th Jan 2019, 13:43
  #1396 (permalink)  
 
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Originally Posted by SWBKCB View Post
In that case, why buy them and not just wait?
I completely agree with you, I would much rather start with a clean sheet. However Virgin tried that with Little Red and failed and flybe comes with an awful lot of passengers for £2.2m.
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Old 13th Jan 2019, 14:01
  #1397 (permalink)  
 
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They couldn't start with a clean sheet - that's the whole point behind the structure of the deal. If Flybe went bankrupt - which appears to have been imminent given the £2.2 million purchase price and the immediate £20 million cash injection - then the Heathrow slots would have reverted to BA as insolvency would have been a default under the slot lease agreement. To keep the Heathrow slots, Flybe had to stay in business and so the low purchase price behind the deal recognises that the new owners of the business will - if the transaction goes through - have to take on a lot of liabilities which they would have been able to wash away in a CVA or an administration. The cash from the Gatwick slot sale will probably tide them over for a week or two until negotiations with the card providers can take place to unblock some of the forward ticket sales and the £20m "loan" - aka emergency cash injection - goes in. Once / if the deal is complete, then the £80m injection is the clean-up money needed to sort out the mess and recapitalise the business.

Sad to see a company so systematically destroyed by mis-management in such a short space of time.
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Old 13th Jan 2019, 14:18
  #1398 (permalink)  
 
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Agree with your conclusion Albert but this a lot of company to turnaround just to hold on to some Heathrow slots.
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Old 13th Jan 2019, 14:25
  #1399 (permalink)  
 
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Sorry - I am sure the Manchester hub operation also has good value to Virgin in future, as does greater control of AMS and CDG slots for KLM and Air France, as shareholders in VS. It is not exclusively about Heathrow slots, but that has to be a major part of the equation even if those slots don't end up remaining on UK domestic routes when the restrictions on their use become less onerous 15 months from now. Put it another way, the fact that the Gatwick slots are sold - and to Vueling of all people - makes it pretty clear that Gatwick isn't really part of the picture.
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Old 13th Jan 2019, 15:02
  #1400 (permalink)  
 
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Clearly the various press releases stressing the importance of MAN, LHR and SEN didn’t tell the whole story. AMS and CDG are important too but because they weren’t mentioned I wonder if the AMS and CDG feed will be handed over to Stobart?
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