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-   -   Flybe-V1 (https://www.pprune.org/airlines-airports-routes/637085-flybe-v1.html)

ATNotts 10th Apr 2021 09:52

Exactly! It's a variation on the "prepack administration" that I discussed several posting up the thread. It unethical, it's unfair and it's wrong - but in UK to name one country, it's legal! I suspect other countries have similarly distasteful processes.

cavokblues 10th Apr 2021 09:58

It's similar as to what happens when football clubs go bust. The holding company is placed into administration and a new company set up with the football club name transferred over. Creditors are screwed over etc.

ATNotts 10th Apr 2021 10:22

Absolutely that. I have seen cases where companies have been "prepacked" twice - the original company morphed into a new one, debt free, only to repeat the same fundamental business error, that is not turning a profit, and be flogged on again through a prepack. The only winners are the directors / shareholders or private companies and of course the accountants and lawyers.

southamptonavgeek 10th Apr 2021 17:16

BA318;

I did not state that I expected success, rather that I hope for it.

Personally I think that 'new Flybe' could operate on niche routes in a similar manner to that of Blue Islands - having said that, SI/BCI do appear to have quite a bit of government funding.
I have spoken to a few family members who all spoke very highly of the airline despite having little or no knowledge of aviation, so the brand can't be entirely tarnished. As I have said before, we can only speculate currently, as no real announcements have been made regarding routes, dates, etc.


All the old dead wood is gone, the bad management has gone, all the old airframes are gone, all the expensive jets - with expensive lease and maintenance deals are gone, the big spread of unprofitable routes and bases are gone, the debt is gone... it's a clean slate
Exactly. The original Flybe (this is surely what we must refer to it as?) grew to a size that it could not manage - debts grew as leases could not be ended, and the latest CEOs seemed to bring the airline to a temporary state of profitability before withdrawing all efforts and sinking back into the red.

Skipness One Foxtrot 10th Apr 2021 19:04

ATNotts

So if a new flybe comes to fruition it could actually kill off Loganair and Eastern. A bankrupt business loses it's debts, screws its creditors and comes back debt free post COVID to put the survivors out of business as they are now carrying unsustainable debts. I have a problem with that, it's the unacceptabe face of capitalism IMHO.

Jamie2009 10th Apr 2021 19:18

So what? We live in the real world and it’s legal. On the other points you’ve hit the nail on the head. Average flight time for flybe was 56 mins, price and schedule will be the deciding factors for most.

globetrotter79 10th Apr 2021 19:28

Happy to be proven wrong - but I can't think of an example of an airline successfully making it through any form of 'pre-pack' (to be clear, I'm not talking about a US-style Chapter 11 bankruptcy protection procedure, I mean a 'proper' placement into administration to enable the shedding of debts as being discussed here). Under normal circumstances, one whiff of an airline going into administration (or even the threat of) and punters lose faith overnight. (In reality, I think Covid was only part of flybe Mk1's cash issue - the hanging, and well publicised, threat of potential cessation of ops had already caused a far greater cash crisis).

All this said, the world has never experienced a major close-down of the air travel industry such as that of the last 12 months. In many respects an awful lot of carriers are pretty much going to be starting again from scratch on the vast majority of their routes once travel restrictions ease. At the same time, so much has happened since March last year that I'd wager a decent percentage of flybe's potential future customer base will have forgotten all about the whys and wherefores of their failure.

Could this be the one case of an airline/brand that manages to essentially struggle through administration and back out the other side?

(Whether there's any place left for them in what is frankly a very different market is, of course, the far more fundamental question - let's face it, if the brand was as tainted as some believe, its hardly the end of the world to change it!)

ATNotts 10th Apr 2021 19:48

Swissair morphing into Swiss, and SABENA into Brussels Airlines were pretty close to pre-packs that are still around.

BA318 10th Apr 2021 19:53

Both were subsidiaries which replaced and expanded the parent company no? With Crossair becoming Swiss and DAT becoming SN Brussels. Plus both had state support.

Skipness One Foxtrot 10th Apr 2021 20:45

Jamie2009

So what? I'm uncomfortable with it, legal as it may be. Hence I won't be wishing them well and every success. Same with the contortions Norwegian went through, all legal but not something I would support.

Having said that airports will be in such a weak position that all sorts of subsidy will be thrown at them to encourage folk to fly again. They could make a killing, and as I said, wipe out the competition who survived COVID. It's all a bit Chapter 11....

willy wombat 10th Apr 2021 22:13

Frankly I think you’re all bonkers bothering to debate this. It’s a slot play, not a Flybe relaunch.

cavokblues 11th Apr 2021 06:45

I'm not sure Loganair should feel too aggrieved about the relaunch. They closed down loss making BMIR, placed it into administration thus wiping the debts, and transferred a lot of the business over to Loganair.

kfsimpson 11th Apr 2021 09:08

Jamie2009

Reliability.

Skipness One Foxtrot 11th Apr 2021 17:51

Calm down and get some fresh air. I'm not a communist at all, stop thinking in extremes. I am being mildly critical of being able to bring a company back from the dead minus it's debts and allowing it to start afresh as a new entity. If you think that's communism then....
They're businesses, commercial enterprises and when they fail, it's healthier for all that they stay dead. It skews the market less. Yes Loganair screwed BMI Regional, yes Eastern screwed Air Southwest. And if Zombie Flybe comes back, make no mistake, it will screw Logan and Eastern. The key difference with Logan/BMI was that many of the staff came over from the failing business and went straight back to work.
We should stop skewing the market like this, two wrongs don't make a right, and no, flybe should stay dead. It's not being a communist to state that anyone with ambitions to take on the incumbents with a new airline is free to do so and should surely try. Hardly Marxism/Leninism.

davidjohnson6 11th Apr 2021 18:08

S1F - I'm going to counter your argument. The shareholders of Flybe have been wiped out. The creditors will likely see a few pence in the pound if anything. The management and staff have (almost) all received a P45. While the staff might well be hired in non-flying jobs, the senior managers are likely to find their CVs are tainted. What remains now is just a legal framework with various licences and rights, as well as a (very) small number of employees to ensure compliance with continued retention of those licences. What the shell company does have, is a lot of systems, procedures / policies and software, which are necesary to make an airline work. Essentially we are left with plumbing, but plumbing that, critically, is known to operate effectively at scale, subject to a suitable business model
If Flybe were left to liquidation, then all the plumbing gets sent to landfill

If Cyrus are just trying to get their hands on the slots, sell them on, and then shut down the company anyway, then I agree this is one of the undesirable parts of capitalism - essentially people getting their hands on things without having worked fairly to earn them
However.... if there is a genuine desire to restart an airline, then it seems wasteful in a society to throw away all the plumbing if it can be reused. Furthermore, by selling the assets, the creditors get to recover a bit more of the money they were owed. The shareholders of course still lose all their money, and the senior managers are unlikely to be rehired, so those who caused the company to decline over the years don't get rewarded for failure

An analogy might be a house that is in disrepair and was repossessed because the previous owner couldn't pay the mortgage. Do you demolish the house and just sell a bare plot of land, or do you sell it to a builder who knows how to fix the leaky roof and install a new kitchen, in the knowledge that the builder will make a big pile of money when selling the house in 12 months time to another buyer ?

Local Variation 11th Apr 2021 18:55


Originally Posted by airsouthwest (Post 11026369)
You do realise if Flybe comes back some of those companies will get new contracts and therefore those people will have jobs again?

Strictly proforma if they have any sense. Or minimum initial credit and payment terms. Or standard terms based on recovery of debt. That said, at least one supplier will always take the chance.

Jamie2009 11th Apr 2021 19:33

Thereís no point getting irate with some one who doesnít share your views and none of us have a clue really whatís happening.

Iím fairly sure Cyrus wouldnít be investing cash if there wasnít going to be a return.
Iím also fairly sure Loganair didnít attempt to make reps to the CAA because they were bored, more like worried.

Who knows🤷‍♂️, just got to wait and see.

oapilot 11th Apr 2021 19:34

This thread is always going to be emotive and partisan. On the one hand youíve got ex Flybe crew who are desperate to get flying again and Flybe 2 will give at least some of them the chance to do that.

On the other hand youíve people who donít want to lose their jobs having struggled through the last 12 months of this pandemic, if Flybe reappear and go for the opposition.

The big unknown is the business plan. To use the builders analogy, if the repaired house adds value to the whole street, great. If itís fixed by damaging the neighbours foundations and nicking their slates then not so.

Regardless of the slots argument, Flybe 2 could end up doing a lot of damage to the regional market.

Historically Flybe have made a big thing about regional connectivity, but history doesnít always bear this out. Airsouthwest is right, Eastern disposed of the carcass of his namesake airline, but Flybe blew a couple of million quid selling ultra cheap tickets to Gatwick to put them off the route which subsidised most of the other routes out of the Southwest. Net result Newquay was a ghost town for a long time and the Cash Cow route ended up a PSO.

Being backed by a Hedge Fund doesnít do much to inspire confidence that the Regions will continue to be well served if thereís a quick buck to be made.


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