FlyBe axing jobs
Return fare Glasgow - Benbecula £350 on the day - and the aeroplane leaves half empty.
Given there is little in life so perishable as an aircraft seat once the the doors are closed, would it not make more economic sense to flog them off cheap at the last minute?
Given there is little in life so perishable as an aircraft seat once the the doors are closed, would it not make more economic sense to flog them off cheap at the last minute?
Wasn't suggesting standby tickets. Non flexible tickets sold once the computer predicts that there is lots of wasted space surely provide some revenue where previously there was none.
You haven't commented on the utterly outrageous fare of £175 single for a 45 minute flight.
You haven't commented on the utterly outrageous fare of £175 single for a 45 minute flight.
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Return fare Glasgow - Benbecula £350 on the day - and the aeroplane leaves half empty.
Given there is little in life so perishable as an aircraft seat once the the doors are closed, would it not make more economic sense to flog them off cheap at the last minute?
3rd Feb 2013 15:37
Given there is little in life so perishable as an aircraft seat once the the doors are closed, would it not make more economic sense to flog them off cheap at the last minute?
3rd Feb 2013 15:37
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scotbill....The smaller the aircraft used the higher the price. Go and rent a navajo and a pilot to do the same 45min trip if you think like that.
It's not unusual for small short domestic routes to be as expensive as a long haul flight. If people want to get there fast and comfortable then fly, next step down probably the train, however if you want to pay £25.99 may I suggest you catch the bus or drive yourself.
It's not unusual for small short domestic routes to be as expensive as a long haul flight. If people want to get there fast and comfortable then fly, next step down probably the train, however if you want to pay £25.99 may I suggest you catch the bus or drive yourself.
scotbill....The smaller the aircraft used the higher the price. Go and rent a navajo and a pilot to do the same 45min trip if you think like that.
It's not unusual for small short domestic routes to be as expensive as a long haul flight. If people want to get there fast and comfortable then fly, next step down probably the train, however if you want to pay £25.99 may I suggest you catch the bus or drive yourself.
It's not unusual for small short domestic routes to be as expensive as a long haul flight. If people want to get there fast and comfortable then fly, next step down probably the train, however if you want to pay £25.99 may I suggest you catch the bus or drive yourself.
However, you are deliberately ignoring the point. The Saab 340 has 34 seats. If it departs with 17 empty (as it often does) that is a completely wasted resource. The reason the locos make a profit is that they cling to the old airline accountant's mantra that the only thing that counts is "Bums on seats"
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Scotbill
"However, you are deliberately ignoring the point. The Saab 340 has 34 seats. If it departs with 17 empty (as it often does) that is a completely wasted resource. The reason the locos make a profit is that they cling to the old airline accountant's mantra that the only thing that counts is "Bums on seats"
I'm not sure that it isn't you who is ignoring the facts here.
The loco business model works thus:
Buy a seat well in advance = cheap, or at least until the cheap seats have sold.
Buy a seat on the day = eye watering expense.
The full fare model works thus:
Buy a seat well in advance = cheap enough, until cheap seats sold.
Buy a seat on the day = eye watering expense.
The only difference here is that the loco's only operate on routes thick enough to provide a good load, hence generally fares appear cheaper due to greater numbers of bums on seats, business "efficiencies" and on board sales.
Both models rely on yield management, that allows them to tweak their prices higher as tickets sell out and the travel date approaches.
If Loganair were to sell seats cheaply on the day, no-one would buy in advance. The cash would run out and they'd go bust in a nutshell.
Clearer now?
I'm not sure that it isn't you who is ignoring the facts here.
The loco business model works thus:
Buy a seat well in advance = cheap, or at least until the cheap seats have sold.
Buy a seat on the day = eye watering expense.
The full fare model works thus:
Buy a seat well in advance = cheap enough, until cheap seats sold.
Buy a seat on the day = eye watering expense.
The only difference here is that the loco's only operate on routes thick enough to provide a good load, hence generally fares appear cheaper due to greater numbers of bums on seats, business "efficiencies" and on board sales.
Both models rely on yield management, that allows them to tweak their prices higher as tickets sell out and the travel date approaches.
If Loganair were to sell seats cheaply on the day, no-one would buy in advance. The cash would run out and they'd go bust in a nutshell.
Clearer now?
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Who said anything about Loganair making people redundant?? They're a completely different company and as a franchise of FlyBE just use the FlyBE brand and reservations capability which works very well for them. So far as I know they are doing pretty well in spite of the inclement trading conditions.
They've always charged quite a lot but if you live in the Islands or Caithness you can use the air discount scheme which offers a substantial discount to those purchasing full fares. If you need to go to one of their destinations for the day then pay up and enjoy the ride.
Sorry for the thread drift. Back to FlyBE's woes. I'm sorry the crews are going through consultation. I wish them well and hope they can find a way to minimise the number forced out.
They've always charged quite a lot but if you live in the Islands or Caithness you can use the air discount scheme which offers a substantial discount to those purchasing full fares. If you need to go to one of their destinations for the day then pay up and enjoy the ride.
Sorry for the thread drift. Back to FlyBE's woes. I'm sorry the crews are going through consultation. I wish them well and hope they can find a way to minimise the number forced out.
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yes, sorry Wingowango - missed the irony. Again I hope that there is a bearable outcome for as many as possible at FlyBE. One never know's when one might find themselves in a similar position...
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Indeed. However, scotbill raises an interesting point in that Flybe are bumbling around with a c.65% load factor, if that. That's pretty poor especially considering they make a lot of their income from on board sales (WTF is the phrase?) etc.
I know it's a balancing act but a poor LF doesn't seem to be working too well.
I know it's a balancing act but a poor LF doesn't seem to be working too well.
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FLybe arn't.
Loganair and scottish economics of island flights are neither here nor there.
If you book a week in advance it comes down to under 200 and if your on the air discount scheme that will be even cheaper. The on the day price will only mainly hit goverment, NHS and utilitys and MOD. They have done the standby tickets thing in the past years ago and all the locals never buy a ticket and you just end up with a plane full of standby tickets and huge q's in the terminals and an utter ball ache with baggage working out which ones go and which stay. And the added hassel of having screaming PAX in the terminal begging to get on because there relative is about to die in Glasgow Royal for the 20th time that year.
The price of the flights has been spoken about as long as I can remember back to the days of pissing money into the wind with the first oil boom.
I suspect the Saab will be about 2100 an hour to operate.
Which at 200 quid a head return would bring it to 18 pax just to break even.
You could drop the aircraft size but to be honest the next size down would be the J41 but they would cost about the same but you would loose 7 seats and you would still need the cabin crew and you wouldn't be able to get get wheel chair pax onboard.
Loganair's model has been working for years and they are recruiting pilots.
If you wanted to go by a none air route to Benbecular it would be 80 quid return. So for 120 quid you are getting back 16 hours of your life.
You would leave at 12 lunchtime and get in at 22:10 and the return would be leaving at 7am and arriving at 14:20. And the ferry is canceled more often than flights and the ferry doesn't run every day of the week.
But if you look at a train from Glasgow to London the travel time is 5 hours.
About 130 quid return looking at booking a return next week for 7 days.
So you rock up to the airport an hour before departure. Its 1.5 hour sector and 30mins-hour clearing Gatwick so the train is still down by 1.5hours but you don't have to contend with the gatwick express at some highly expensive rate or the slow train into the center of town which can be an hour plus. You can take your own food and drink, leave your phone on while departing the station and more to the point nobody gives a toss if you have a rechargable battery in your bag or are reading your kindle.
Flybe to do the same route is the same price but with a connection in the middle. Easy is 10 quid cheaper but direct.
Before APD it was cheaper to fly now its comparable, the timings from most large population centers are virtually the same give or take 30mins. But you don't have to endure the airport experence at either end and in general train stations are right in the public transport systems which many airports arn't.
Basically anywhere south of EDI/GLA internal in the UK its alot more even playing field. To the north the time penalty for not going by air quite quickly puts rail out for most. I would take a train to be honest these days if I was paying myself. Work wise I tend to be trying to get to airports so flying makes sense.
If the route involves crossing water or is over 1:30 its more than likely going to be be better flying. Multi hop forget it fly into europe first.
More to the point though the Eastern model starts becoming more economical and flybe won't have the cash to see them off on routes previously contested like they did before. Punters do like the Eastern product and for all easterns faults they did have spare aircraft kicking around and the customer experence was pretty good considering the aircraft they ran especially in the J32 days.
There are going to be a few regional operators rubbing there hands and hatching plans to apply pressure.
So I suspect this is just round one and in someways the ones first out the door are going to be at an advantage to the ones that follow. If its last in first out at least they will still be inside 3 years on previous type ratings. As I can see there is going to be issues with folk going out the door with only a month or two left on there IR's. Personally if I was going to the sim for an OPC I would be asking the TRE to generate the LPC paper work every 6 months.
Loganair and scottish economics of island flights are neither here nor there.
If you book a week in advance it comes down to under 200 and if your on the air discount scheme that will be even cheaper. The on the day price will only mainly hit goverment, NHS and utilitys and MOD. They have done the standby tickets thing in the past years ago and all the locals never buy a ticket and you just end up with a plane full of standby tickets and huge q's in the terminals and an utter ball ache with baggage working out which ones go and which stay. And the added hassel of having screaming PAX in the terminal begging to get on because there relative is about to die in Glasgow Royal for the 20th time that year.
The price of the flights has been spoken about as long as I can remember back to the days of pissing money into the wind with the first oil boom.
I suspect the Saab will be about 2100 an hour to operate.
Which at 200 quid a head return would bring it to 18 pax just to break even.
You could drop the aircraft size but to be honest the next size down would be the J41 but they would cost about the same but you would loose 7 seats and you would still need the cabin crew and you wouldn't be able to get get wheel chair pax onboard.
Loganair's model has been working for years and they are recruiting pilots.
If you wanted to go by a none air route to Benbecular it would be 80 quid return. So for 120 quid you are getting back 16 hours of your life.
You would leave at 12 lunchtime and get in at 22:10 and the return would be leaving at 7am and arriving at 14:20. And the ferry is canceled more often than flights and the ferry doesn't run every day of the week.
But if you look at a train from Glasgow to London the travel time is 5 hours.
About 130 quid return looking at booking a return next week for 7 days.
So you rock up to the airport an hour before departure. Its 1.5 hour sector and 30mins-hour clearing Gatwick so the train is still down by 1.5hours but you don't have to contend with the gatwick express at some highly expensive rate or the slow train into the center of town which can be an hour plus. You can take your own food and drink, leave your phone on while departing the station and more to the point nobody gives a toss if you have a rechargable battery in your bag or are reading your kindle.
Flybe to do the same route is the same price but with a connection in the middle. Easy is 10 quid cheaper but direct.
Before APD it was cheaper to fly now its comparable, the timings from most large population centers are virtually the same give or take 30mins. But you don't have to endure the airport experence at either end and in general train stations are right in the public transport systems which many airports arn't.
Basically anywhere south of EDI/GLA internal in the UK its alot more even playing field. To the north the time penalty for not going by air quite quickly puts rail out for most. I would take a train to be honest these days if I was paying myself. Work wise I tend to be trying to get to airports so flying makes sense.
If the route involves crossing water or is over 1:30 its more than likely going to be be better flying. Multi hop forget it fly into europe first.
More to the point though the Eastern model starts becoming more economical and flybe won't have the cash to see them off on routes previously contested like they did before. Punters do like the Eastern product and for all easterns faults they did have spare aircraft kicking around and the customer experence was pretty good considering the aircraft they ran especially in the J32 days.
There are going to be a few regional operators rubbing there hands and hatching plans to apply pressure.
So I suspect this is just round one and in someways the ones first out the door are going to be at an advantage to the ones that follow. If its last in first out at least they will still be inside 3 years on previous type ratings. As I can see there is going to be issues with folk going out the door with only a month or two left on there IR's. Personally if I was going to the sim for an OPC I would be asking the TRE to generate the LPC paper work every 6 months.
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It could depend on who starts paying the bills. I guess those short of money are sometimes prepared to do dirty things with unsavoury people.
Re. Press Speculation
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Business is business. Does it really matter who pays the bills as long as they are paid on time and it keeps people in jobs?
A Ryanair pound note looks the same as a Flybe pound note according to my bank.....
A Ryanair pound note looks the same as a Flybe pound note according to my bank.....
Last edited by Say Mach Number; 6th Feb 2013 at 06:48.
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Flybe reaches agreement with Ryanair.
Announced to the LSE this morning, Flybe reaches agreement with Ryanair :-
RNS Number : 2043X
Flybe Group PLC
06 February 2013
Flybe Group plc
FLYBE GROUP REACHES AGREEMENT WITH RYANAIR TO CREATE FLYBE IRELAND IN THE EVENT OF A SUCCESSUL BID BY RYANAIR FOR AER LINGUS
The Board of Flybe Group plc ('Flybe') has today announced that it has reached agreement with Ryanair Holdings PLC ('Ryanair') over the possible transfer of a number of aircraft and operating routes as part of a package of remedies that Ryanair has submitted to the European Commission DG Competition ('EC'), in the context of its offer for Aer Lingus Group PLC ('Aer Lingus')
The proposed transaction is contingent upon the EC's approval of Ryanair's proposed remedies and a successful bid by Ryanair for Aer Lingus. If Ryanair's acquisition of Aer Lingus is completed, Flybe expects to seek formal shareholder approval for the acquisition of Flybe Ireland from Ryanair in early Autumn 2013.
Flybe also announces that it has received irrevocable acceptances representing 64% of the shareholders in support of this possible transaction. The European Commission had insisted on the pledging of irrevocable acceptances by over 50% of Flybe's shareholders as a condition precedent for the deal to create Flybe Ireland proceeding.
ENQUIRIES:
Flybe
Jim French, Chairman & Chief Executive Officer
Andrew Knuckey, Chief Financial Officer
SUMMARY
· The Board of Flybe has reached agreement with Ryanair to create a well-capitalised, well-funded business in Ireland in the event that Ryanair completes the takeover of Aer Lingus.
· The Board believes that the opportunity to serve the Irish aviation market is in line with its published strategy, and its previous solid track record of successful acquisitions.
THE TRANSACTION
· Flybe has agreed to acquire a new company, Flybe Ireland, from Ryanair for €1 million.
· Prior to its acquisition by Flybe, Ryanair has agreed to transfer to Flybe Ireland:
o 43 routes, all within Europe, many to or from current Flybe destinations;
o The requisite number of slots and licences to operate the routes;
o A minimum of 9 Airbus A320 aircraft;
o The requisite number of flight crew, aircraft engineers, management and facilities to operate the business;
o A cash injection of €100 million;
o All forward sales cash and liabilities, estimated at a further circa €50m in working capital funding.
· Ryanair in consultation with Flybe will undertake to develop a one year business plan to deliver a cost structure that based on the assumption that the preceding year's revenue remains the same, would provide €20 million in pre-tax profits in the 12 months following the transfer to Flybe Ireland. In the event that the business plan does not project €20 million in pre-tax profits, there is an agreed adjustment mechanism factored into the €100 million cash contribution referred to above.
FLYBE IRELAND
· Flybe Ireland will:
o Operate from bases in Dublin and Cork;
o Operate 43 routes to 34 destinations in Europe. Flybe currently operates to approximately half of those destinations in its Flybe UK business;
o Deploy Flybe's frequency model on the major city pairs, and its leisure model on the European leisure markets;
o Have the right to use the Aer Lingus brand for up to three years post the transaction. This will allow it to develop its own brand position in Ireland during a realistic transition period.
COMMITMENTS MADE BY FLYBE TO RYANAIR AS PART OF THE EC REMEDY PACKAGE
· Flybe Ireland will be committed to operating an agreed frequency on routes, with the ability to terminate a certain number of routes per year whilst maintaining stable capacity in the Irish market.
· If Flybe Ireland exceeds the route termination threshold, it will pay a contractual penalty.
THE EXPECTED TIMETABLE
Outlined below is the expected timetable:
· March 2013
o On 6 March 2013, EC is scheduled to give a decision on the competition aspects of Ryanair's bid for Aer Lingus.
o If the EC gives the agreement for Ryanair's bid for Aer Lingus to proceed, Ryanair may then re-activate its bid with a view to gaining sufficient acceptances from Aer Lingus shareholders.
· May 2013
o If the Ryanair bid is reactivated and is successful, Flybe would expect the deal to close on or around mid May.
· Summer 2013:
o If the Ryanair bid for Aer Lingus has been successful, Flybe will undertake due diligence on the new entity.
o It is expected that the Class 1 Circular will be completed and posted to Shareholders in August 2013, followed by an EGM for shareholders to vote.
· October 2013:
o The effective date of the transaction is envisaged to be October 2013 with Flybe Ireland commencing operations under Flybe's ownership at the beginning of the 2013/14 IATA winter season.
WHY THE BOARD BELIEVES THE TRANSACTION TO BE BENEFICIAL TO FLYBE GROUP SHAREHOLDERS
The Board of Flybe believes that the transaction offers the following benefits to its shareholders:
· As stated at IPO, the Group's strategy is to diversify away from its reliance upon UK revenue. This opportunity is a good mixture of diversification, and overlap with its existing route network, to fulfil this goal.
· Flybe has existing presence and network points at approximately half of the 34 destinations in the 43 route package.
· Flybe Ireland will be a well-capitalised company, with approximately €150m of cash on the balance sheet, including the one off capitalisation by Ryanair, and the transfer of the forward sales cash within Aer Lingus at the time of the transaction.
· Flybe Ireland will increase Flybe's ability to drive further economies of scale from fleet basing, suppliers and airports, as part of this transaction.
· Flybe has proven expertise in the acquisition and turnaround of acquired entities:
· In March 2007, Flybe acquired British Airways' UK regional airline, BA Connect, a business losing £40m per year at acquisition. The business was fully integrated into Flybe within 12 months, and made profits by the end of its first year of ownership. At the time of its acquisition the business had 39 aircraft, 1,700 staff and £350m of revenue.
· In August 2011, Flybe acquired the loss making Finncomm Airlines (Finland based), in a joint venture with Finnair. This business has been restructured and refocused, and as a result has delivered substantial growth with an expectation of profits in 2013/14 in line with the original acquisition plan. The business now has a €300m turnover and operates 28 aircraft.
Commenting on today's announcement Jim French, Flybe's Chairman and Chief Executive Officer, said:
"Flybe would be delighted to be granted the opportunity to service the Irish aviation market through Flybe Ireland, an airline which would be based in Ireland and dedicated to developing a broad range of scheduled services for business and leisure markets.
"This development of creating a Dublin based airline is in line with the Company's stated strategy at the time of IPO - which was to diversify away from reliance upon the UK economy. The terms of the deal negotiated ensure that Flybe Ireland will be a well-capitalised, well-funded company, enabling us to deliver upon that strategic aim. Flybe has a history of acquiring businesses of scale, restructuring and refocusing them and as a result delivering profitable returns. This opportunity plays clearly to that corporate strength.
"Flybe would be proud to have the chance to serve the Irish markets, and would be, as we seek to be throughout the rest of Europe, a good employer and corporate citizen.
"However, before Flybe Ireland can come into being there are many hurdles to overcome, not least the EC accepting the remedies offered by Ryanair in its offer to take over Aer Lingus, and then the shareholders of Aer Lingus accepting an offer from Ryanair. However, Flybe has positioned itself well if these events come to pass, while in the meantime we continue to focus upon the delivery of the cost reduction and efficiency plan we outlined in January".
6 February 2013
RNS Number : 2043X
Flybe Group PLC
06 February 2013
Flybe Group plc
FLYBE GROUP REACHES AGREEMENT WITH RYANAIR TO CREATE FLYBE IRELAND IN THE EVENT OF A SUCCESSUL BID BY RYANAIR FOR AER LINGUS
The Board of Flybe Group plc ('Flybe') has today announced that it has reached agreement with Ryanair Holdings PLC ('Ryanair') over the possible transfer of a number of aircraft and operating routes as part of a package of remedies that Ryanair has submitted to the European Commission DG Competition ('EC'), in the context of its offer for Aer Lingus Group PLC ('Aer Lingus')
The proposed transaction is contingent upon the EC's approval of Ryanair's proposed remedies and a successful bid by Ryanair for Aer Lingus. If Ryanair's acquisition of Aer Lingus is completed, Flybe expects to seek formal shareholder approval for the acquisition of Flybe Ireland from Ryanair in early Autumn 2013.
Flybe also announces that it has received irrevocable acceptances representing 64% of the shareholders in support of this possible transaction. The European Commission had insisted on the pledging of irrevocable acceptances by over 50% of Flybe's shareholders as a condition precedent for the deal to create Flybe Ireland proceeding.
ENQUIRIES:
Flybe
Jim French, Chairman & Chief Executive Officer
Andrew Knuckey, Chief Financial Officer
SUMMARY
· The Board of Flybe has reached agreement with Ryanair to create a well-capitalised, well-funded business in Ireland in the event that Ryanair completes the takeover of Aer Lingus.
· The Board believes that the opportunity to serve the Irish aviation market is in line with its published strategy, and its previous solid track record of successful acquisitions.
THE TRANSACTION
· Flybe has agreed to acquire a new company, Flybe Ireland, from Ryanair for €1 million.
· Prior to its acquisition by Flybe, Ryanair has agreed to transfer to Flybe Ireland:
o 43 routes, all within Europe, many to or from current Flybe destinations;
o The requisite number of slots and licences to operate the routes;
o A minimum of 9 Airbus A320 aircraft;
o The requisite number of flight crew, aircraft engineers, management and facilities to operate the business;
o A cash injection of €100 million;
o All forward sales cash and liabilities, estimated at a further circa €50m in working capital funding.
· Ryanair in consultation with Flybe will undertake to develop a one year business plan to deliver a cost structure that based on the assumption that the preceding year's revenue remains the same, would provide €20 million in pre-tax profits in the 12 months following the transfer to Flybe Ireland. In the event that the business plan does not project €20 million in pre-tax profits, there is an agreed adjustment mechanism factored into the €100 million cash contribution referred to above.
FLYBE IRELAND
· Flybe Ireland will:
o Operate from bases in Dublin and Cork;
o Operate 43 routes to 34 destinations in Europe. Flybe currently operates to approximately half of those destinations in its Flybe UK business;
o Deploy Flybe's frequency model on the major city pairs, and its leisure model on the European leisure markets;
o Have the right to use the Aer Lingus brand for up to three years post the transaction. This will allow it to develop its own brand position in Ireland during a realistic transition period.
COMMITMENTS MADE BY FLYBE TO RYANAIR AS PART OF THE EC REMEDY PACKAGE
· Flybe Ireland will be committed to operating an agreed frequency on routes, with the ability to terminate a certain number of routes per year whilst maintaining stable capacity in the Irish market.
· If Flybe Ireland exceeds the route termination threshold, it will pay a contractual penalty.
THE EXPECTED TIMETABLE
Outlined below is the expected timetable:
· March 2013
o On 6 March 2013, EC is scheduled to give a decision on the competition aspects of Ryanair's bid for Aer Lingus.
o If the EC gives the agreement for Ryanair's bid for Aer Lingus to proceed, Ryanair may then re-activate its bid with a view to gaining sufficient acceptances from Aer Lingus shareholders.
· May 2013
o If the Ryanair bid is reactivated and is successful, Flybe would expect the deal to close on or around mid May.
· Summer 2013:
o If the Ryanair bid for Aer Lingus has been successful, Flybe will undertake due diligence on the new entity.
o It is expected that the Class 1 Circular will be completed and posted to Shareholders in August 2013, followed by an EGM for shareholders to vote.
· October 2013:
o The effective date of the transaction is envisaged to be October 2013 with Flybe Ireland commencing operations under Flybe's ownership at the beginning of the 2013/14 IATA winter season.
WHY THE BOARD BELIEVES THE TRANSACTION TO BE BENEFICIAL TO FLYBE GROUP SHAREHOLDERS
The Board of Flybe believes that the transaction offers the following benefits to its shareholders:
· As stated at IPO, the Group's strategy is to diversify away from its reliance upon UK revenue. This opportunity is a good mixture of diversification, and overlap with its existing route network, to fulfil this goal.
· Flybe has existing presence and network points at approximately half of the 34 destinations in the 43 route package.
· Flybe Ireland will be a well-capitalised company, with approximately €150m of cash on the balance sheet, including the one off capitalisation by Ryanair, and the transfer of the forward sales cash within Aer Lingus at the time of the transaction.
· Flybe Ireland will increase Flybe's ability to drive further economies of scale from fleet basing, suppliers and airports, as part of this transaction.
· Flybe has proven expertise in the acquisition and turnaround of acquired entities:
· In March 2007, Flybe acquired British Airways' UK regional airline, BA Connect, a business losing £40m per year at acquisition. The business was fully integrated into Flybe within 12 months, and made profits by the end of its first year of ownership. At the time of its acquisition the business had 39 aircraft, 1,700 staff and £350m of revenue.
· In August 2011, Flybe acquired the loss making Finncomm Airlines (Finland based), in a joint venture with Finnair. This business has been restructured and refocused, and as a result has delivered substantial growth with an expectation of profits in 2013/14 in line with the original acquisition plan. The business now has a €300m turnover and operates 28 aircraft.
Commenting on today's announcement Jim French, Flybe's Chairman and Chief Executive Officer, said:
"Flybe would be delighted to be granted the opportunity to service the Irish aviation market through Flybe Ireland, an airline which would be based in Ireland and dedicated to developing a broad range of scheduled services for business and leisure markets.
"This development of creating a Dublin based airline is in line with the Company's stated strategy at the time of IPO - which was to diversify away from reliance upon the UK economy. The terms of the deal negotiated ensure that Flybe Ireland will be a well-capitalised, well-funded company, enabling us to deliver upon that strategic aim. Flybe has a history of acquiring businesses of scale, restructuring and refocusing them and as a result delivering profitable returns. This opportunity plays clearly to that corporate strength.
"Flybe would be proud to have the chance to serve the Irish markets, and would be, as we seek to be throughout the rest of Europe, a good employer and corporate citizen.
"However, before Flybe Ireland can come into being there are many hurdles to overcome, not least the EC accepting the remedies offered by Ryanair in its offer to take over Aer Lingus, and then the shareholders of Aer Lingus accepting an offer from Ryanair. However, Flybe has positioned itself well if these events come to pass, while in the meantime we continue to focus upon the delivery of the cost reduction and efficiency plan we outlined in January".
6 February 2013
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If Flybe are taking on Aer Lingus routes and getting €100m in the process, it should buy them time.
Whether the end result will be better or not is difficult, as Flybe seem to accord blame to everyone but themselves - APD, economy etc.
Whether the end result will be better or not is difficult, as Flybe seem to accord blame to everyone but themselves - APD, economy etc.