airsouthwest

A heated post matey.

The main concerns on here & elsewhere revolve around the presence of Venture Capitalists which any balanced view would regard as "troublesome".

My reply to both your personal assertions are wrong & then wrong but with safeguards for those who could be set to lose yet again.

Good luck

airsouthwest

I acknowledged that they're restricted currently as BMI remedy slots but I suggested as that's an EU ruling was there a possibility it could be challenged in a post Brexit UK courtroom.

Flybe sold Gatwick slots for millions, they sold 3 to Vueling for £4.5m in 2019 and 25 Gatwick slots for £20m in 2013. Those Heathrow slots, 44 in total, would have some value attached to them in a normal aviation environment. Admittedly they're quite hard to price, the administrators, EY, can't price them and have them listed as 'unspecified' value.

Maybe the authorities are starting to question why these slots continue to slip back into the custody of BA when they have effectively done a venture capitalist job themselves of relieving these slots from smaller regional operators and converting some into lucrative long-haul. Its strange how BA are the custodians or effectively trustees of these slots and yet WW was one of the first to stick the boot in and call Fybe's request for a Govt load on a commercial terms a "blatant misuse of public funds" and this happened just before Flybe potentially gained grandfather rights. If these slots are supposed to be a "remedy" against BA's monopoly at LHR, why has BA effectively been given effectively trustee status over them and yet they spend a fortune on lawyers trying to ensure that they stayed out of the hands of regional operators?

I'd have to agree. How can the remedy possibly be judged to have been successful if after nearly 10 years, the slots at one of the most coveted airports in the world remain firmly in the hands of the original holder. There are certainly questions to be asked as to why this is the case and whether the original remedy fulfilled its purpose. I would also say that IAG aren't the only factor here, as the HAL charging structure has basically made it hugely punitive to operate anything smaller than B737/A320 aircraft reducing the ability of a meaningful and viable competitive challenge having any likely success.

So the size of a/c bmi operated? Why are these slots being portayed as 'regional operators' slots?

It could be argued that at least six or seven of the slot pairs in question were gobbled up by BA and converted to long haul when they bought regional operators BRAL and Brymon. When they eventually tired of regional flying, they flogged it all off to Flybe. Great, job done, decks cleared and slots making shed loads of money. Only when they saw another opportunity and gobbled op slot heavy BMI did the authorities spot that the monopoly was becoming a little too obvious. When Flybe CEO Saad Hammad started moving into LHR, BA must have woken up and realised the possibility that he had a cunning plan and there was a crack developing in their aim of protecting empire LHR at all cost. Making money with Dashes into LHR would be difficult but what if Flybe developed more alliances with competitors? From then on, and realising that grandfather rights were imminent BA probably had it in for Flybe. Could it be that the CAA have never come across this complex scenario before and they are simply more scared of BA's massive legal guns than Flybe's?

SWBKCB

Because they could/can only be used on certain routes. The reason they became available was to ensure competition on routes which BA and BMI served once BMI became part of BA. Most of those routes are regional routes.

of course, an airline with a large holding of slots - Lufthansa or SAS for example could buy these slots, shift their slots around and then make a pair which would be better suited to long haul ops and sell them off or lease out that pair while operating these slots on their short haul flight. One way of making it work.

biddedout

BA still have less of a share of slots than most of their rivals have at their home bases and London is one of the most competitive markets in the world. BA we’re not scared of Flybe and a couple of Dash 8s. Flybe was losing money for years. It wasn’t BA suddenly thought it was going to succeed and killed it off. It was a badly run airline.

SWBKCB

...because most of them came from BMI's services to Aberdeen and Edinburgh, and therefore the majority of the slots are restricted to these routes for the first 3yrs of any operators use. Of course, if the slots are not taken up by another operator then BA can use the slots for whatever long haul or short haul route they choose. If the remedy was designed to offer meaningful competition and after nearly a decade the majority of the slots remain with the original holder, I think it fair to question the success of the proposed remedy in the market.

I guess that Brexit may give Thyme OpCo a mechanism to question the remedy assigned to these slots and linking into the Government's proposed 'levelling up' agenda, they may just have the ear they need to get their voice heard.

If we're being cynical I would have said Thyme's old director, old Etonian Farrell had more than a sympathetic ear at the government. His association with Ben Elliot, chairman of the Tory party, gives him a direct line.

Lucien Farrell's previous history suggests he has no interest in revitalising Flybe. He wants to make himself more money and he won't see a return quick enough on overseeing a regional UK airline. You could argue maybe he wants to sell a profitable airline but the fact he resigned from Thyme OpCo the very day the CAA refused to give the new airline the old AOC, and with it any chance at certain slots, perhaps suggests otherwise.

I'm not anti Flybe, never have been. I liked the old airline and would have loved them to stay afloat and survive but I find it very difficult not to be cynical about the aims and intentions of the people behind the attempt to see the airline restart.

I cannot imagine EY being too keen on allowing someone doing a smash and grab while they are busy trying to extract as much value as possible for the creditors (not very good for their reputation). Likewise, a pension scheme with a funding hole and a pension regulator taking a keen interest in not going to be keen on letting this happen. The pension regulator has been embarrassed before in these situations and I doubt they will let it happen again.

Albert Hall

The 2nd paragraph which I have highlighted is very damning, if it does indeed accurately reflect the notes from the hearing correctly. It points firmly in the direction of someone (Thyme OpCo) being more interested in making a fast buck than reviving an airline, and perhaps the leasing cost of a couple of Dash 8s is chicken feed in comparison with what htey hope they could earn from retaining and flogging off the former FlyBe slots.

I have been quite keen on the idea of a "new" FlyBe being resurrected from the ashes of the failed model, with, or more likely without, the name FlyBe but a bunch of venture capitalist sharks just out to turn a (handsome) profit, probably at the expense of the debtors of the former airline leaves a particularly nasty taste in the mouth.

But there is just a chance that the venture capitalists might actually be willing to stick around for a while to try and help the venture succeed. Of course they will be interested in taking some profit out later on, that's what they do but it doesn't mean they will flog it on day one or even with the first year or so.

That's all fine and dandy, but too often they don't have a great track record of playing the long game, Grey Bull is a prime example of that, and not just in the aviation industry. Maybe I'm being a tad unfair tarring all venture capitalists with the same brush as Grey bull.

Not just this sector the evidence is all around in industry & revealed latterly the retail sector.

Saad had gone by the time Heathrow came along. That happened during the time of the interim Chairman running the show and looking for a way to make Flybe more attractive in the City to help the share price, so I recall hearing at the time.

The smash and grab was done before EY were involved. Cyrus had security over Flybe's slots before it collapsed and so any value is already beyond reach of EY and the pensions people.

Unless the whole document I'd got is an elaborate wind-up, it is a transcript of the hearing so reports every word. I've had a PM to say that anyone can request it from the CAA by e-mailing [email protected] to ask for a copy. It is worth a read and there are a few interesting bits but that was the stand-out line to me.

Who is paying/ funding EY through all of this? I can’t imagine they will be cheap.

Administrators are usually first in the queue to be paid from whatever money is made from the sale of the assets - they're ahead of even the creditors.

Current bill is a cool £12m. - http://assets.ey.com/content/dam/ey-...f-expenses.pdf

The remedy slots are flawed conceptually. The notion that flybe can compete effectively on EDI-LHR is not supported.
The market is Edinburgh-London
Operators
BA EDI-LHR high volume high frequency feeding large % to long haul
CFE EDI-LCY high value high frequency point to point
EZY EDI-LGW EDI-LTN EDI-STN low cost but high volume high frequency supporting business travel
BE EDI-LCY high volume high frequency point to point compared to :
BE EDI-LHR flying propellor driven aircraft into the highest cost airport feeding almost no one, this is less of an offering to market than Little Red who were at least flying A320 and feeding long haul.

It's an apples and pears comparison, even BMI dropped GLA-LHR as the Scotland-LHR market was undermined by easyJet being a more compelling offer in market. flybe were competing on price against a higher frequency and faster service on BA, it wasn't set up to succeed IMHO. It's misleading to say BA have a monopoly per se, it's just that with the cost and constrainsts existing at LHR, no one else can really make it work in certain markets. EDI-London is widely fragmented across LHR/LGW/STN and the EDI-LHR offering is in strong competition against that. The flawed concept is that in order to keep competition healthy, someone else NEEDS to fly EDI-LHR. Arguably someone else should also be flying LHR-MAD/DUB as those are IAG monopolies with BA selling across both brands. It was a nice idea on paper that just didn't pan out.

Just playing devils advocate with the above statement, the BE EDI-LHR was feeding the same demographic as BA were. They had numerous codeshares to feed onwards to long haul operators, including Virgin Atlantic, Cathay, Air India, Etihad, Emirates, Delta, Singapore etc etc. The problem I suspect with BE flying domestically into LHR, and every other operator who has tried to go up against BA, is that BA can afford to take a loss on the regional market as it supports the long haul one.

This is the same problem worldwide. Most regional airlines that fly into major hubs are supported by larger flag carriers who can afford to take the hit as it keeps business flowing to the more profitable side of the company. Think American Eagle, United Express, Delta Connection, KLM Cityhopper, Lufthansa Cityline, Alitalia Cityliner, TAP Express, etc

Where a secured creditor has title to the assets - or in this case, slots - then the administrators get nothing if the holder of the security exercises their rights. It's basically a process of the secured creditor re-claiming property which is already theirs.

Albert hall. Flybe never had an interim chairman.
French was chairman and after Hammad became CEO the board appointed Laffin as Chairman. This occured om 2013.
Laffin remained chairman until the sale to Connect Airways.
I'm pretty sure LHR routes were introduced under Hammads watch
they were certainly imtroduced while Laffin was chairman

Saad left with immediate effect in October 2016. Flybe announced LHR-EDI and ABZ in Dec 2016 operating from March 2017.

...and from October 2016, Laffin was both Chairman and interim CEO of Flybe before Ourmieres-Widner arrived in January 2017

It looks like it's not all about the slots. This is why Loganair were so desperate to address the CAA...

THYME OPCO LIMITED

Companies House Directors...

can you explain?

Three new Directors appointed a few days ago including Robert Knuckey who had a long history with Flybe and its forerunners as well as Walker Aviation. Any significance in that?

TBH I can't find anything of what Loganair said either in the hearing minutes or the CAA's decision so unless someone has insight to share, we don't know what they did and didn't say. It's clear they said something though.

The new directors look like the classic finance, HR and industry trio of non-execs being stuck onto a board to lend credibility and convince external players like the CAA that there is a company structure. I can't imagine anyone is getting too excited about it beyond the comments from the new poster from Birmingham here though.

What I find more interesting is that one of the new directors of Thyme Opco and its parent company Thyme Opco parentco is a Anthony Kevin Hatton who was formerly a director of GB Airways, Orion Airways and TUi airways.
At least he is someone with great experience of the airline industry.

Maybe brummy was suggesting that new Directors with credible aviation histories pointed to the likelihood that this was more than just a 'slot grab' financial exercise as some have suggested. Would they want to risk possible reputational damage if it were only that?

Albert Hall

They provided written submissions, it’s in the main body of the text

Expressflight

It does appear to make the "slot grab" theory rather less tenable, but time alone will tell.

Yes, I can see that, thank you. The question I had was what they were about.

Filings from Companies Hse today indicate Thyme opco now have the trade marks relating to Flybe and its previous names. This indicates a deals gone through........ Looks like Cyrus have registered a charge against the trademarks.

Thyme Opco Limited will shortly before the anticipated date for completion be renamed “Flybe Limited” (“the Purchaser”) and in preparation for the Transaction completion, the Company has filed with the Registrar of Companies an application to be renamed “FBE Realisations 2021 Limited”. Because of current capacity limitations being experienced by the Registrar of Companies, the usual same-day change of name service is unavailable, but it is expected that [b]the Company’s change of name will become effective shortly.

What does that mean ?

From what I can work out, that means that Thyme Opco will be renamed as "Flybe Limited" - alongside the purchase of the Web address and brands/logos, it seems to point towards a retention of the original name.

Pity. "Thai Mop Co" had a certain ring to it.

But ‘realisations’ ?