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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.

Atlantic Explorer 11th Apr 2021 19:36

airsouthwest

Just a small issue of a global pandemic decimating domestic and international travel and killing demand. There is no room for an extra UK regional operator at the moment and certainly likely into the mid future. Any routes are likely to have wafer thin margins if any at all.

Jamie2009 11th Apr 2021 19:36

Reliability.... Good point, they have to start small as the only Dash sim is now in Austria which will cause logistical problems for crew training.... or Ethiopia here we come😬🤞.
Bet the lease company give them extra aircraft they won’t initially need for next to nowt, so if one breaks they can jump on a spare.

Jamie2009 11th Apr 2021 19:40

Atlantic Explorer

A new airline with no debts could operate on wafer thin margins to decimate the opposition and play a long game. An airline with debts to service could not.....

oapilot 11th Apr 2021 19:56

Or maybe they could just do a Flybe, go bust, and start up again minus the debt.

Albert Hall 11th Apr 2021 21:21

I decided to take a few days out from the thread after the aggressive reaction to my previous post. Since then several others have said much of what I would have replied anyway and the discussion is live.

There is a strong view, publicly stated by some quite prominent people, that the Flybe re-start is driven only by slots and the value of Flybe's holding. I don't need to say sorry for sharing that view or noting that it has been expressed elsewhere.

There is no longer a bunch of domestic routes served by Flybe at the time of its collapse needing to be flown. As every week passes, more of the Flybe routes are being taken up by others - easyJet has taken up the second airline position on BHX-AMS and has taken over BHX-EDI/GLA, Ryanair has announced new services to Knock on ex-Flybe routes, Loganair, Blue Islands, Stobart Air and Eastern have all taken up large or medium chunks of the former Flybe network. BACF has gone on LCY-BHD and so on. And on. And on.

Unless those behind the re-incarnation of Flybe are totally ignoring all of this, there are hardly any gaps left for the reincarnated airline to fill. The other airlines have the market pretty well covered, or at least those bits of the market where there is money to be made.

A decent venture capitalist (and by all accounts the guy from Cyrus is sharp in every meaning of the word) can't fail to have spotted this. It lends to speculation there must be some other motive - and it's a short step from there to the question of value in the Flybe slots.

The new start-up has lost some key people who decided they wouldn't take the 40% pay cut imposed recently. I have spoken to one and they were pleased to get out. Times are tough all round but you can't launch an airline without postholders.

I assume we will get no closer to understanding the real plan until Flybe 2 is licenced and this all plays out. The recent management departure had the same suspicions. So as clarity won't come from Flybe / Cyrus the big question for me is on what grounds Loganair are obviously raising objections and whether these could and should be published. It could be one of a few things - the market doesn't need a new airline, foreign ownership rules with a US investor, slot blocking and possibly something else instead. In other words, do they really have a case to object, instead of objecting for objection's sake?

That's my view. If you don't like it, having a go is all very well but doesn't make me wrong and you right - or vice versa!

EI-BUD 11th Apr 2021 22:36

Excellent debate of the various perspectives.

My guess here is that there probably more to this than seems obvious. If they can start an airline and secure the LHR slots that's a good foundation in terms of an asset and security. However, I've been around long enough to see how cut throat the industry is. Yes they may well have a sporting chance on the cost base side, but they'll need scale to generate cash to keep them in the game, and strong cash reserves to capture any sizeable network and win out over the competition who will fight their corner.

If I were a betting man I'd not fancy the odds.

In relation to Loganair, they have a sizeable fleet of regional jets that most likely will have significantly higher unit operating costs compared to a prop.

​​​​​​Southampton might have been a huge base, but I'd take it as a given the a low cost airline will secure a base their as soon as the runway enhancement is complete, feels like an easyJet space, though Wizz might move quick to secure it. In such an event Flybe2 might not get the same opportunity. BHD is wrapped up between EI and LM for comparable routes and in that market Emerald will be asking soon with a clean sheet cost base so not a quick win for Flybe2. Hard to see where the key market or operating model would be at.

Jamie2009 12th Apr 2021 05:40

Albert Hall

Who’s left the business out of interest? Which posts not people?

biddedout 12th Apr 2021 08:13

Whatever the motives they already look more credible as a business than some of the many brass plate (UK).com (registered in Jersey:hmm:) airlines currently springing up all over the place and being dutifully rubber stamped by the CAA.

southside bobby 12th Apr 2021 08:23

... "many brass plate (UK).com (registered in Jersey) airlines currently springing up all over the place"....Please enlighten your audience.

bean 12th Apr 2021 08:35

Laker Airways was a brass plate Jersey company. Much revered and totally screwed by the cartel of North Atlantic operators
What do you think about them?🥶

southside bobby 12th Apr 2021 10:34

Original poster comments are in the present tense..."currently springing up all over the place" so can the audience be enlightened please.

medod 12th Apr 2021 11:38

I read the EY report.

Seems as likely to me that Cyrus bought the business to try and sell it (and in particular its slots, hence the appeal to the CAA over the withdrawal of the OL) on as to actually (re)start an airline, if not moreso.

Tell me why I'm wrong.

Edit: downloaded the report and read it over the weekend. Hadn't looked at new posts since then. Reading them, I guess I'm not wrong.

Edit edit: aiui ownership of the slots depends on having an OL, having an OL depends upon various other bits, people etc being in place. So a pretence of possibly being a functioning airline needs to be retained. Everything points to Cyrus believing it can realise value from the slots.

biddedout 12th Apr 2021 12:42

I am talking about the subsidiaries of foreign airlines setting up UK businesses to get UK AOC's to get round the brexit fiasco. Effectively controlled from afar and propped up by the parent.

bean 12th Apr 2021 12:47

Well, Cyrus won"t get any buyers for the slots for 2 to 3 years at leasy due to the pandemic and by that time will have lody them again

ATNotts 12th Apr 2021 13:25


Originally Posted by medod (Post 11026809)
I read the EY report.

Seems as likely to me that Cyrus bought the business to try and sell it (and in particular its slots, hence the appeal to the CAA over the withdrawal of the OL) on as to actually (re)start an airline, if not moreso.

Tell me why I'm wrong.

Edit: downloaded the report and read it over the weekend. Hadn't looked at new posts since then. Reading them, I guess I'm not wrong.

Edit edit: aiui ownership of the slots depends on having an OL, having an OL depends upon various other bits, people etc being in place. So a pretence of possibly being a functioning airline needs to be retained. Everything points to Cyrus believing it can realise value from the slots.

I get that, but it's one thing the company wanting / needing people in place, but which "people" would be willing to join the business and potentially muddy their career credentials given that the motives of Cyrus so blinding obvious to people on this forum?? They have either spun them a bloody good yarn, or else there is the intention to actually operate an airline, however flawed many posters and pundits believe such a plan is.

biddedout 12th Apr 2021 14:19

Exactly AT.
Meanwhile welcome home ECOI.

southside bobby 12th Apr 2021 15:25

"Springing up all over the place"...
The alluding was far greater than the facts I guess then.

Wycombe 12th Apr 2021 16:36


Meanwhile welcome home ECOI.
Interestingly appears to have crossed the pond eastbound (via Iceland) yesterday, and is just arriving in TLS as I type having departed WIC earlier.

Guess this one isn't going for firebomber conversion. FB post I saw suggests its on its way to Oz?


southside bobby 12th Apr 2021 17:17

...Receding into the distance perhaps...slated for next stage = TLS-Heraklion.

Whispering Giant 12th Apr 2021 17:56

Itís off to Oz to fly for Cobham Aviation. Photos I saw of it earlier show it in Cobhams livery.


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