Flybe-9

[canberra97]

Originally Posted by SealinkBF

Virgin always do this. They "tried" for years to get bmi. Nice coverage for them, again.

It was Sir Michael Bishop that was reluctant to sell BMI to Sir Richard Branson as the Virgin Group were actively pursuing the the airline but according to whoever you wish to believe the two did not see eye to eye on many things and it was perceived that Bishop had a dislike of Branson hence the fact that after ''trying for years'' to get BMI Bishop finally sold out to Lufthansa who already had a controlling interest in the airline.

By all accounts Bishop could be a difficult person to work with and if it wasn't for his arrogance and reluctance to sell BMI to Virgin we may well have seen a respectable second force airline again something that the United Kingdom hasn't really had since the days of BCAL over thirty years ago.

Sir Michael Bishop not selling BMI to the Virgin Group was a lost opportunity for British aviation and a similar situation will never be available again.

The fact that Virgin Atlantic have shown an interest in Flybe has obviously surprised everyone and with the investment of Delta in the airline and the fact that they themselves have a very large order for the A221 series perhaps if any purchase was made we could possibly see the Flybe fleet modernised in the future with that aircraft.

Interesting times but we're all have to wait and see how this all works out, at least the news seems to have come directly from Virgin Atlantic rather than from Sir Richard Branson himself so there could well be some substance behind this announcement.

If the deal did go through I envisage huge cuts to the current Flybe network as well as a reduction in the fleet.

[nguba]

A few theories:

1. This is a genuine bid driven by Delta and Air France-KLM to maximise connectivity from UK airports to Virgin, Delta and Air France-KLM.
2. This has been leaked by Virgin to put its name out there.
3. This has been leaked by Flybe to try and get others like IAG to move forward.

[mik3bravo]

Trying to put the stock value in play, it's on the deck.

[Albert Hall]

It may well have been tactically leaked to try to start a bidding war - after all, they have to do something to try to get the share price back up and in the absence of any clear plan of action from management beyond a firesale of assets, this may be it.

It's not totally mad though. AF would presumably welcome existing and expanded feeds to CDG. For KL, a bunch of 175s and AMS slots would fit very nicely. For VS, the feeds at LHR and MAN are worth a look. Questions are what then happens to the rest, and given that AF/KL are not having a good time in the UK market, would they (as incoming shareholders to VS) see this as a solution or just making a big problem even bigger?

[mik3bravo]

My hypothesis remains they are trying to draw out Willie Walsh and his board to come to the party. BA or EI, doesn't matter, either way the problematic cost base of BE will require deep open heart surgery, it won't be a basic pruning exercise.

[racedo]

Originally Posted by RoyHudd

Virgin UK would be a great brand, to complement Virgin Atlantic. He's done a job with Virgin Trains, and I can see it happening again here.

You mean like Virgin East Coast Main Line............................

[racedo]

Originally Posted by mik3bravo

My hypothesis remains they are trying to draw out Willie Walsh and his board to come to the party. BA or EI, doesn't matter, either way the problematic cost base of BE will require deep open heart surgery, it won't be a basic pruning exercise.

In agreement with you and doubt IAG will play.

[EI-BUD]

I remain unconvinced that Flybe is of real interest to Virgin. Yes there are connectivity opportunities at Manchester, but beyond that I cannot see anything more that would justufy taking on the scale and challenges that exist at Flybe. Also, I don't believe that Virgin by way of Delta would be acting on behalf of AFKLM, I just don't see them as so joined up.

​​​​​​IAG is not going to be remotely interested in Flybe, the only item of real value is a small batch of LHR slots, which would most likely have to be surrendered to allay competition concerns.

I still believe that the best strategic fit for a sustainable Flybe as a very large regional airline is to reposition itself into the ACMI space in the following form;

• Prune the scheduled network focussing on currently profitable routes, e.g. I'm guessing strongholds like SOU and BHX that for many markets are exclusive to Flybe
• Get out of the way of LoCo's
• More significantly go after ACMI contracts, this EU market is untapped compared to say the US. Cityjet are early adopters in this space. It is early days in this space, so I believe Flybe given their extensive experience could succeed here.

They need a financial backer who shareds this view. Stobart is the fit here. They've already shown with the BACF contract that they have intent in this space. They could work closely with Virgin at the connected airports like MAN, through a Virgin ACMI. And the Dublin routes (SOU, CWL, EXT, DSA) going into Aer Lingus Regional could help to secure the Aer Lingus Regional contract beyond 2022/3, which will be hotly contested by Cityjet. LCY ops rebrand BA under a Stobart ACMI.

Stobart potentially has the largest opportunity here.
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[mik3bravo]

Originally Posted by EI-BUD

I remain unconvinced that Flybe is of real interest to Virgin. Yes there are connectivity opportunities at Manchester, but beyond that I cannot see anything more that would justufy taking on the scale and challenges that exist at Flybe. Also, I don't believe that Virgin by way of Delta would be acting on behalf of AFKLM, I just don't see them as so joined up.

​​​​​​IAG is not going to be remotely interested in Flybe, the only item of real value is a small batch of LHR slots, which would most likely have to be surrendered to allay competition concerns.

I still believe that the best strategic fit for a sustainable Flybe as a very large regional airline is to reposition itself into the ACMI space in the following form;

• Prune the scheduled network focussing on currently profitable routes, e.g. I'm guessing strongholds like SOU and BHX that for many markets are exclusive to Flybe
• Get out of the way of LoCo's
• More significantly go after ACMI contracts, this EU market is untapped compared to say the US. Cityjet are early adopters in this space. It is early days in this space, so I believe Flybe given their extensive experience could succeed here.

They need a financial backer who shareds this view. Stobart is the fit here. They've already shown with the BACF contract that they have intent in this space. They could work closely with Virgin at the connected airports like MAN, through a Virgin ACMI. And the Dublin routes (SOU, CWL, EXT, DSA) going into Aer Lingus Regional could help to secure the Aer Lingus Regional contract beyond 2022/3, which will be hotly contested by Cityjet. LCY ops rebrand BA under a Stobart ACMI.

Stobart potentially has the largest opportunity here.
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I don't disagree with your thinking here but the elephant in the room for Stobart is the ongoing high profile distraction of a damaging court battle relating to completely separate matters. Also, from a corporate risk standpoint, I'm not sure if by Stobart acquiring Flybe, it may be a stretch too far for Stobart. Could it be a step too far that could inflict serious corporate risk to Stobart. Who knows, though suggest keep a close eye on investment analysts comments and sentiment trends towards all of this, they'll pull no punches.

[SealinkBF]

Originally Posted by racedo

You mean like Virgin East Coast Main Line............................

Which was 90% owned by Stagecoach

[El Bunto]

Originally Posted by The96er

In what way would it save a small fortune ? - most airlines are beginning to outsource their maintenance meaning the bean counters have done their sums and concluded that it's cheaper that way. Why bother with all the facilities management overheads, labour cost, training cost etc...

They haven't necessarily decided that outsourcing is 'cheaper'. After all, the contractor has the largely same costs plus a margin on top.

What it does enable is reduction in assets on the books, elimination of legal risk, flexibility of supply to match fleet. If an potential purchase already has an in-house maintenance arm then those aren't really 'problems'.

[True Blue]

Most on here talk about the idea that Flybe will reduce in size under a new owner, concentrate on the most profitable routes. I agree that is what is most likely to happen. Why can't they do that themselves if that is what needs to happen? Why do they need a new owner to make that happen?

[Navpi]

This would be great news for Manchester which has the best domestic feed in the UK. Ok it might be a publicity play by Virgin but would certainly make sense in terms of feeding Virgin flight ex Manchester. As has been said peripheral routes may suffer. Doncaster and even Birmingham might be sweating if this did have legs. Virgin have shown zero interest in Birmingham which might lose yet more services.
I could also see the Exeter HQ shifted to Gatwick or possibly a domestic base at Manchester.

[HH6702]

Hasn't VS made a loss over the last few years ??
if so why would they want Flybe and would have to put millions into it just to get it through the winter.

it makes no sense VS going after Flybe if anything it will srink Flybe.

flybe needs someone with deep pockets and in the same type of market (stobbart)

BA I would say would just pick up certain routes it wants

[Cyrano]

From the Economist website: Flybe is in urgent need of a new strategy
Conclusion:

Flybe’s managers may be proud that the carrier is Europe’s largest regional airline. But earning money by transporting people short distances in uneconomical planes is a risky strategy in a well-connected continent. To ensure long-term survival, they should focus the carrier’s efforts on routes where geography or public subsidies give them an edge. Any of Flybe’s 78 planes that can neither be deployed on these services, nor lent to external partners, should be withdrawn from service–and quickly.

[brian_dromey]

Originally Posted by True Blue

Most on here talk about the idea that Flybe will reduce in size under a new owner, concentrate on the most profitable routes. I agree that is what is most likely to happen. Why can't they do that themselves if that is what needs to happen? Why do they need a new owner to make that happen?

It could happen, but flyBe might find raising capital difficult and/or very expensive due to the share price. Being part of the wider AF/KL/VS/DL structure would help there. I don't understand the strategy for Virgin. From March 19 flyBe will have no operations at LGW, but will serve ABZ/EDI/NQY from LHR, there will be connection opportunities at MAN, which might be helpful. I don't think that any airline has successfully shrunk to profitability. Excising expensive aircraft and property and matching overheads to revenue realities are necessary. But flyBe does not have a vision for the kind of airline it wants to be.

Some posters have mentioned that flyBe should more actively seek ACMI operations - they operate ATR's for SAS and previously operated for Finnair and Brussels Airlines. Im not sure that there is a high market for this in Europe, as there is in the US. The markets are very different. easyJet with the A32x and Ryanair with 737s have bypassed a lot of hubs and lowered fares. That makes operating thin routes solely for connections a difficult financial proposition and may explain why flyBe extensively codeshares with hub airlines like AF/KL/EI where it flies into their hub, rather than have extensive ACMI operations. ACMI and own brand flying are not mutually exclusive and flyBe could well operate all their UK routes as "Virgin Atlantic" and continue to explore the ACMI market.

[FFMAN]

Hmmm....in a well-connected continent hey? Ok the continent maybe but the UK other than to and from London is far from well-connected. That's the space that FlyBe fills, As someone has already said: if FlyBe didn't exist you may end up having to create it. A far better longer term strategy is to focus the significant resources of this very rich country in to filling the infrastructure gap in areas that aren't London and the South East

[HH6702]

Flybe maybe would like to srink in size over the next few weeks and lay loads of staff off
however they don't have the money to pay staff off so that isn't an option at the minute
also returning aircraft early will cause extra fees to be paid to lease companies

only option is to sell or an investor to put millions in to relaunch the airline

[CroqueMonsieur]

It's time APD was charged on London flights only. Or London APD should be greatly increased and the proceeds used to support vital regional connectivity. London and the South East don't care if flyBE go under as they're still beneficiaries of one of the biggest aviation markets on earth. For the rest of us flyBE going under would be a disaster. Yes easyJet or Ryanair could offer connectivity but only omnibus select routs and likely at a greatly reduced frequency.

[ATNotts]

To read some of the last dozen or so posts, you could be forgiven for believing that Virgin has signed on the dotted line and everything is hunky dory.

In reality, it's only Sky News that have reported what are only discussions. I would imagine that there are others involved in similar discussions, be they venture capitalists, others from within the aviation sector, or gawd forbid Mike Ashley. BBC News have absolutely nothing on their business pages about Virgin (or indeed FlyBe.).

Patience is a virtue!!