Flybe-V1
Allan, you could be wrong but who knows, I don't think we have seen the last of this.
It will be interesting to see the next administrator report from EY to see if there is any detail on the sale to Thyme Opco. Did it even happen? The only press reports suggest that it was subject to confidential conditions (I can imagine they revolved around the likely-hood of retaining slots). Thyme Opco seem to have leased themselves a very old Dash, but so far, that seems about it. Did they go as far as taking on the operations setup and post holders etc, or were they just working in parallel with EY to see how things panned out? Flybe still exists with the same director/s and EY have just extended the administration period for three years (and 1 year from Connect Airways). Is this to give the market a chance to recover before they flog off the remaining engines and to claim the outstanding debts (Virgin still owe about 9M according to the last report). EY were trying to hold it all together as an airline and apparently still had a few essential staff in place to make it so. What happened to them? Did they go to thyme or are they still employed by EY? Regardless of what LF is up to, are EY still trying to sell it on to another party? LF may have been sticking around to see how the LHR slots battle was going but there were other major peak-time big-airport slots in the portfolio. Desperate times but according to their reports, EY still saw value in the whole bundle.
It will be interesting to see the next administrator report from EY to see if there is any detail on the sale to Thyme Opco. Did it even happen? The only press reports suggest that it was subject to confidential conditions (I can imagine they revolved around the likely-hood of retaining slots). Thyme Opco seem to have leased themselves a very old Dash, but so far, that seems about it. Did they go as far as taking on the operations setup and post holders etc, or were they just working in parallel with EY to see how things panned out? Flybe still exists with the same director/s and EY have just extended the administration period for three years (and 1 year from Connect Airways). Is this to give the market a chance to recover before they flog off the remaining engines and to claim the outstanding debts (Virgin still owe about 9M according to the last report). EY were trying to hold it all together as an airline and apparently still had a few essential staff in place to make it so. What happened to them? Did they go to thyme or are they still employed by EY? Regardless of what LF is up to, are EY still trying to sell it on to another party? LF may have been sticking around to see how the LHR slots battle was going but there were other major peak-time big-airport slots in the portfolio. Desperate times but according to their reports, EY still saw value in the whole bundle.
Possibly not but times are changing and as the big aviation reset takes place, people may be realising that the slots that BA originally asset striped from regional airlines actually belong to the regions. Other large hub airports around the world don't seem to have a problem with the smaller airlines flying in from the regions. A former CEO of Flybe (Saad) was making inroads into reclaiming LHR slots. They were presumably called remedy slots for a reason so what's to stop them being claimed again from BA in a year or so when things pick up?
Using NQY to London as an example. Flybe were doing a good 250-300 people a day with the flexibility of three rotations. BA tried NQY in the past but gave up. Their once a day new offering is hardly going to fill the gap.
Using NQY to London as an example. Flybe were doing a good 250-300 people a day with the flexibility of three rotations. BA tried NQY in the past but gave up. Their once a day new offering is hardly going to fill the gap.
They don't belong to the regions in an open market, you want them to "belong to the regions" then you need them ring fenced in the regulations.
If you look at "other large hub airports" of a comparable size then look at runway capacity :
LHR 2 vs :
AMS 6
CDG 4
FRA 4
MAD 4
ZRH 3
This is why LHR slots became so scarce, in a purely open and commercial market, the airport has a slot that can be used for
a) flybe Q400 to Newquay (72 seats)
b) Emirates A380 to Dubai (489 seats)
Given the airport uses footfall and throughput to drive commercial retail profits to ensure a revenue stream beyond landing charges, it's a no brainer. The only way LHR gets prop feed on a reliable basis is via ringfencing certain markets and taking them out of the slot pool or finally building runway 3 ( and probably still doing the ring fencing piece). I understand, and correct me if I am wrong, that flybe's LHR operation was a loss maker. Operating Q400s against A320s at a lesser frequency to ABZ/EDI only meant that they had to lead on price. LHR is not the future of flybe IMHO, if there's a future to be had. I suspect there's not, nor should there be given where they ended up. There's a lot of good people being led up the garden path and getting their hopes up I think.
If you look at "other large hub airports" of a comparable size then look at runway capacity :
LHR 2 vs :
AMS 6
CDG 4
FRA 4
MAD 4
ZRH 3
This is why LHR slots became so scarce, in a purely open and commercial market, the airport has a slot that can be used for
a) flybe Q400 to Newquay (72 seats)
b) Emirates A380 to Dubai (489 seats)
Given the airport uses footfall and throughput to drive commercial retail profits to ensure a revenue stream beyond landing charges, it's a no brainer. The only way LHR gets prop feed on a reliable basis is via ringfencing certain markets and taking them out of the slot pool or finally building runway 3 ( and probably still doing the ring fencing piece). I understand, and correct me if I am wrong, that flybe's LHR operation was a loss maker. Operating Q400s against A320s at a lesser frequency to ABZ/EDI only meant that they had to lead on price. LHR is not the future of flybe IMHO, if there's a future to be had. I suspect there's not, nor should there be given where they ended up. There's a lot of good people being led up the garden path and getting their hopes up I think.
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Looks like the CAA made their decision on the old Flybe’s AOC and route license’s. so new Flybe will have to get a new AOC and operating and route licenses.
CAA decision on Flybe’s AOC and operating license
CAA decision on Flybe’s AOC and operating license
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They were planning on using the new OL anyway. The only reason they wanted to keep the old flybe one was so that there was enough time to obtain the slots back. After that the plan was to transfer everything over to Thyme Opco.
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https://www.caa.co.uk/uploadedFiles/...nistration.pdf
Interesting read, especially Logan Air tried to have a say...
Interesting read, especially Logan Air tried to have a say...
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BBC Spotlight future Skills Centre
Looks like G-CLXC is being stripped down by Exeter Aerospace, after watching BBC Spotlight on the Future Skills Centre. Possible 'heavy' check, pre-proving flights etc.
Looks like it's all part of the jigsaw, getting the engineering skills back up and running for more to come.
Looks like it's all part of the jigsaw, getting the engineering skills back up and running for more to come.
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It’s not G-CLXC that’s in the hangar being stripped, it’s another one from the same previous operator in the same livery that’s been in Exeter over a year for scrapping. Parts of it are for sale on EBay marketplace.
Last edited by Whispering Giant; 10th Mar 2021 at 19:36. Reason: Additional text added.
Jamie2009
There's a lot in there and it will take time to digest but it does look like EY have been doing a lot of complex work trying to put something together to help release a little more value for the creditors including staff and pensioners. Did read it correctly in that in theory, they did in theory manage to get a grip on the remedy slots at LHR? Lets hope they find a way to move on to plan B if there is one but as things stand the only winners in this are likely to be KLM/AF/HOP/AL etc as they move in an backfill work from the other end. I wonder what the CAA will actually have left to regulate in a few years.
There's a lot in there and it will take time to digest but it does look like EY have been doing a lot of complex work trying to put something together to help release a little more value for the creditors including staff and pensioners. Did read it correctly in that in theory, they did in theory manage to get a grip on the remedy slots at LHR? Lets hope they find a way to move on to plan B if there is one but as things stand the only winners in this are likely to be KLM/AF/HOP/AL etc as they move in an backfill work from the other end. I wonder what the CAA will actually have left to regulate in a few years.
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Am I right in reading that and thinking the new Flybe basically wanted the slots and the operating license without the legacy liabilities (ie £500m of debt) from the old company? Isn't there a danger if that was approved it would have have left a very nasty precedent, i.e. If you have a bit of debt just close the company and start a new legal entity with no debt but transfer the OL and the valuable assets.
Also, legally, wouldn't ex employees taken on then had a very good legal argument regarding TUPE? And I'm not sure the new Flybe would have necessarily wanted to inherit the employment rights of the old airline.
Also, legally, wouldn't ex employees taken on then had a very good legal argument regarding TUPE? And I'm not sure the new Flybe would have necessarily wanted to inherit the employment rights of the old airline.
My understanding is that this has moved well out of the realms of TUPE and any reemployment of Flybe staff would be entirely optional and without any strings.
As for the ditching liabilities and carrying on, it seems that this is quite common these days and thee are several ways of doing it. According to EY's reports, this had been considered as a sort of pre pack administration scheme early on but was dropped due to CAA and OL / AOC issues. Whatever the intentions of the original consortium, after the Coronavirus downturn hit it and given the perilous state of most airlines it would be difficult to claim that there was some kind of scam going down to avoid liabilities.
It would have been interesting to see how they / the courts would have dealt with the pension scheme though.
As for the 400-500m of creditor claims. This figure does look eyewatering but it is a bit of a distraction in that its is a raw snapshot of what was owed the day the company went bust. Had the company been able to continue then much of that debt would have been less and due spread over many years. The pension contributions for instance were due at about 4-5m per year over about 10 years and yet the failure triggered a huge wind up debt. This would happen to any Airline with a DB scheme. It would be interesting to look at a scenario with several other large airlines if they went bust due to cashflow running out. They would all immediately clock up massive debts and for some in particular, a very large pension wind up debt.
There is a long list of Flybe debts on the EY report. Many would have been to suppliers who would probably have preferred the continuation or rescue of Flybe so that they could keep cashflows and contracts. Many would prefer not to go chasing debt with little chance of reclaiming much if any at all.
It may be that the CAA are concerned that this may be just a slot buying selling exercise with a token airline attached but I would be surprised if this was the case. If there was concern then it would be easy for EY to call the purchases bluff or at least get them to show their true intentions with a no embarrassment (don't take the pi**)clause. Obviously if the purchaser was being honest about their intentions to create jobs, help the economy etc then they would have no problem with such a clause. EY did this for the sale of Stobart back to Stobart Group. Some of the unsecured creditors might take an interest in ensuring there was no pi** taking too.
If there are conditions on retaining slots and licences in the deal between FLybe (EY) and Thyme then I assume that Flybe will fall back into the hands of EY and they will have to start all over again.
The CAA might have had some concerns but reading their letter, it does seem that they are being a bit jobs-worth. Clearly its going to be very complex for EY to put together a package but given the desperate jobs market and economic downturn, they could have perhaps been a bit more helpful. It is almost as though they made up their minds and then got their lawyers to make it all fit the laws. Ironically, they seemed to rely entirely on retained EU law.
It will be interesting to see if Flybe (EY) appeals or comes back with another structure and proposal. They have extended the administration for three years so are clearly minded not to just give up.
As for the ditching liabilities and carrying on, it seems that this is quite common these days and thee are several ways of doing it. According to EY's reports, this had been considered as a sort of pre pack administration scheme early on but was dropped due to CAA and OL / AOC issues. Whatever the intentions of the original consortium, after the Coronavirus downturn hit it and given the perilous state of most airlines it would be difficult to claim that there was some kind of scam going down to avoid liabilities.
It would have been interesting to see how they / the courts would have dealt with the pension scheme though.
As for the 400-500m of creditor claims. This figure does look eyewatering but it is a bit of a distraction in that its is a raw snapshot of what was owed the day the company went bust. Had the company been able to continue then much of that debt would have been less and due spread over many years. The pension contributions for instance were due at about 4-5m per year over about 10 years and yet the failure triggered a huge wind up debt. This would happen to any Airline with a DB scheme. It would be interesting to look at a scenario with several other large airlines if they went bust due to cashflow running out. They would all immediately clock up massive debts and for some in particular, a very large pension wind up debt.
There is a long list of Flybe debts on the EY report. Many would have been to suppliers who would probably have preferred the continuation or rescue of Flybe so that they could keep cashflows and contracts. Many would prefer not to go chasing debt with little chance of reclaiming much if any at all.
It may be that the CAA are concerned that this may be just a slot buying selling exercise with a token airline attached but I would be surprised if this was the case. If there was concern then it would be easy for EY to call the purchases bluff or at least get them to show their true intentions with a no embarrassment (don't take the pi**)clause. Obviously if the purchaser was being honest about their intentions to create jobs, help the economy etc then they would have no problem with such a clause. EY did this for the sale of Stobart back to Stobart Group. Some of the unsecured creditors might take an interest in ensuring there was no pi** taking too.
If there are conditions on retaining slots and licences in the deal between FLybe (EY) and Thyme then I assume that Flybe will fall back into the hands of EY and they will have to start all over again.
The CAA might have had some concerns but reading their letter, it does seem that they are being a bit jobs-worth. Clearly its going to be very complex for EY to put together a package but given the desperate jobs market and economic downturn, they could have perhaps been a bit more helpful. It is almost as though they made up their minds and then got their lawyers to make it all fit the laws. Ironically, they seemed to rely entirely on retained EU law.
It will be interesting to see if Flybe (EY) appeals or comes back with another structure and proposal. They have extended the administration for three years so are clearly minded not to just give up.
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biddedout, I'm afraid that any hope you might have of this helping the staff and creditors including pensioners is somewhat forlorn. Cyrus Capital held security to Flybe's slots so if there is any value realized by being able to transfer slots from Flybe 1.0 to Flybe 2.0 then it will only be to Cyrus.
I wouldn't be so sure about TUPE. The CAA thing makes it clear that it is a transfer of business being undertaken here, and it is possible that employment rights can be protected in such a situation despite insolvency. The legislation is pretty complicated, but I don't think you can say with certainty that TUPE doesn't apply. It might - or might not.
I wouldn't be so sure about TUPE. The CAA thing makes it clear that it is a transfer of business being undertaken here, and it is possible that employment rights can be protected in such a situation despite insolvency. The legislation is pretty complicated, but I don't think you can say with certainty that TUPE doesn't apply. It might - or might not.