Virgin to table bid for Flybe/Stobart

Shn99

From Sky :
Sky News understands Virgin Atlantic will be the largest shareholder in a new airline group comprising Flybe and Stobart Air
A consortium led by Virgin Atlantic will announce a takeover bid for the regional airline Flybe tomorrow

L1011

I would assume the mean buy flybe and continue the franchise - I doubt Stobart is for sale at the moment.

Shn99

That was taken from their Twitter -
Here’s an article they’ve ran
https://news.sky.com/story/virgin-and-stobart-take-off-with-flybe-in-cut-price-deal-11604069

marno21

It'll be interesting to see the nuts and bolts of this. The main airport that VS/BE share operations is at Manchester. Virgin's other two bases of LGW have no flights or LHR have limited services to Aberdeen, Edinburgh and Newquay.

Flybe also provide connecting services to Aer Lingus's transatlantic services in Dublin from Cardiff/Doncaster/Exeter/Southampton which come into the equation, if they were replaced by EI Regional they would then be operated by Stobart Air, another partner to this agreement.

Dardania

Here's the news update:

https://www.rte.ie/news/business/2019/0111/1022553-flybe-offer/

It appears that Stobart are effectively merging in too?

i71jskz5xu42pb

Dardania wrote: »

Here's the news update:
https://www.rte.ie/news/business/2019/0111/1022553-flybe-offer/

Shares in the company have risen 12.5% since Flybe first said it was exploring a sale

Given Flybe has been having a rough time for a long time why did anybody think the company going up for sale would be a good outcome for shareholders?

The offer values Flybe at 1 pence per share, a 94% discount to the company's closing price of 16.38 pence yesterday.

Assuming the deal goes through that's a sore lesson learned.

Dardania

I take it it carries a mountain of debt, to justify such a sharp fall in share price?

LiamaDelta

New company called 'Connect Airways Ltd' will be owned by a fund (40%) and 30% each by Virgin and Stobart. Connect is also buying Stobarts airline business (Stobart Air) but not the Airport operation part.

sandbelter

Dardania wrote: »

Here's the news update:

https://www.rte.ie/news/business/2019/0111/1022553-flybe-offer/

It appears that Stobart are effectively merging in too?

All the information I've seen in the news points to that.

I can't even tell if Aer lingus Regional is being ring fenced from the Virgin rebrand and i would expect that Virgin and Delta would be very interested in the details of UK customers using Dublin for connection to the US.

sandbelter

LiamaDelta wrote: »

New company called 'Connect Airways Ltd' will be owned by a fund (40%) and 30% each by Virgin and Stobart. Connect is also buying Stobarts airline business (Stobart Air) but not the Airport operation part.

It's looking like Stobart are focusing on SEN going forward. existing the airline business. Bit of a turn given they were looking to extend the franchise contract by three years back in June.

Hope there a Material Adverse Change clause in the franchise agreement.

LiamaDelta

sandbelter wrote: »

All the information I've seen in the news points to that.

I can't even tell if Aer lingus Regional is being ring fenced from the Virgin rebrand and i would expect that Virgin and Delta would be very interested in the details of UK customers using Dublin for connection to the US.

The Stobart Air part of the Stobart business is merging into the new entity. I would imagine the Aer Lingus Regional branding is part of the agreement with Stobart so it would have to remain. If there were a change it would be Aer Lingus Regional - operated by Capital Airlines rather than operated by Stobart. But as Stobart holds the licence I'd imagine it may stay as is. Depends on what sort of rebranding they decide on. FlyBe has a far better recognition than Stobart so I wouldn't be surprised to see that brand being kept. Virgin are strong too obviously but that didn't help 'Little Red'!

Dardania

LiamaDelta wrote: »

The Stobart Air part of the Stobart business is merging into the new entity. I would imagine the Aer Lingus Regional branding is part of the agreement with Stobart so it would have to remain. If there were a change it would be Aer Lingus Regional - operated by Capital Airlines rather than operated by Stobart. But as Stobart holds the licence I'd imagine it may stay as is. Depends on what sort of rebranding they decide on. FlyBe has a far better recognition than Stobart so I wouldn't be surprised to see that brand being kept. Virgin are strong too obviously but that didn't help 'Little Red'!

What was the downfall of Little Red?

I'm just curious, as to why Virgin are interested here - are they looking for feeder to their LH network?

goingnowhere

Virgin bid on the former BMI domestic slots (EI also bid). Virgin won, but had no short haul aircraft so sub contracted to EI to run the service.

Passenger numbers were never great as Virgin seemed to use it only for its own passengers despite having a massive set of interline partners, plus Virgin have very little experience with EU short haul ops, pricing etc

Had EI run it chances are it may have worked out better at a lower cost as it would have been a single unified operation at LHR and EI has a similar significant list of interline partners, e.g. with UA which could be a significant demand driver, also Virgin

rivegauche

1p per share; That's the offer price.
It was the job of the Management to get a good price for the assets of the company most especially its goodwill in the market.

It gets delivered to Delta/Virgin and Stobart on a plate and they are going to morph it in to a feeder service for Delta/Virgin/AF and KLM from Heathrow and Manchester. The FlyBE that was will be no more. It will be stripped down to bare bones.
I don't understand why IAG aren't stopping this. All those passengers paying business fares will be taken away from IAG brands. They've made it clear they don't want to run a regional airline and bought slots at gatwick from FlyBE but since the Management of FlyBE won't go in to voluntary liquidation it is in their interests to go to buy if for more than 1p per share and save the bare minimum and break up the feeder network that Virgin/Delta want to access.
Try to book a flight on stobartair.com and see how far you get.
That's why they need FlyBE.
Considering Britsh Airways' history of dirty tricks to drive Virgin off transatlantic in previous decades I just can't understand why they aren't doing things they can legitamately do to halt their advance in home territories now.

Bye FlyBE. I will miss you.
Brexit finished you off. The Credit Card companies are facing in to months of uncertainty across all the business areas in which transactions are done by Credit Card. FlyBE was on a shaky footing before this and with the Credit Card companies not passing on payments their working captical disappeared in to thin air. FlyBE can't go knocking on door of banks expecting bridging finance as they haven't made a profit in years and are in the middle of a business re-org with BREXIT looming over them. Seat sales over Xmas didn't help them as the Credit Card companies weren't passing on the cash.
A really sad train of events that lead to this.

The regions in the UK will loose their connections to the outside world and will not like becoming more paroachial. No PSO routes will be approved by government not only because they don't believe in them but also because they won't have any budget to pay for them post-BREXIT.

adam88

I’ve flown virgin 6/7 times last 18 months, all out of Gatwick and Manchester. Every time it was Aer Lingus that got us there. Obviously big agreement and working relationship there

TrustedApple

I am booked with virgin myself in a few months time also using Aer lingus before transferring to virgin.

After my last long hawl flight with BA never ever again with them. Service is shocking, food as bad and can't forgot they sold me a flight that I could not connect on.

sandbelter

TrustedApple wrote: »

I am booked with virgin myself in a few months time also using Aer lingus before transferring to virgin.

After my last long hawl flight with BA never ever again with them. Service is shocking, food as bad and can't forgot they sold me a flight that I could not connect on.

To be honest, all the trip reports I've seen for the last year paint a dire picture of Y and increasingly J on BA. It's the photos that are the clincher...

kevinandrew

My last experience with British Airways long haul was 2017 in World Traveller Plus, the overall product and service delivery was already on the slide and had deteriorated considerably on my previous journey with them two years before that so it's unsurprising to hear the recent reviews are less than favourable. 

Virgin Atlantic on the other hand has always, always valued its image as a young, sexy competitor over everything else, even profits! Virgin Atlantic has mastered the ability to make its staff, particularly cabin crew, feel like they are part of something special and it shows in their work ethic. The product is also pretty decent, they have distinctive red cabins with glossy finishes and mood lighting everywhere you look so it always feels "on brand" no matter the cabin you travel in. The 'Upper Class' seat is really dated at this point though, it's narrow, lacks privacy and storage and the seat blocks any natural light from entering the cabin. The service is wonderful though, the IFE and food has always been great and there will be a new seat on the A350-1000 later this year. 

Unfortunately none of those bells and whistles you find on Virgin Atlantic has ever translated into big profits for the airline, their financial performance ranges from mediocre to woeful. It's a very small airline, it carries about 5.5m passengers a year, has 40 aircraft and about 30 destinations. It's far from a powerhouse in aviation but does have good backers in Delta and has a very strong brand and that's what they'll be relying on to help turn the Flybe ops around and into the ideal feeder airline for them, along with Stobart's so called expertise in regional flying. 

I personally think this new venture has a very uphill battle, nobody has been able to make UK domestic or regional operations work in years and I'm not sure Stobart taking over operational responsibility and Virgin slapping their livery on a handful of Bombardiers is going to suddenly produce the results nobody else could. The refocus on Manchester could have potential, it may even pose a minor threat to IAG and the Aer Lingus hub at Dublin but at the same time Virgin will never want to pull focus away from the higher yielding operation at Heathrow while Stobart is still intent on pushing its Southend agenda and the Carlisle experiment, both totally irrelevant to Virgin's business so there's a lot of strategy to still work out going forward.

sandbelter

kevinandrew wrote: »

I personally think this new venture has a very uphill battle, nobody has been able to make UK domestic or regional operations work in years and I'm not sure Stobart taking over operational responsibility and Virgin slapping their livery on a handful of Bombardiers is going to suddenly produce the results nobody else could. The refocus on Manchester could have potential, it may even pose a minor threat to IAG and the Aer Lingus hub at Dublin but at the same time Virgin will never want to pull focus away from the higher yielding operation at Heathrow while Stobart is still intent on pushing its Southend agenda and the Carlisle experiment, both totally irrelevant to Virgin's business so there's a lot of strategy to still work out going forward.

I was looking at going from Manchester to Edinburgh a cough of week ago, I ended up booking the train, I surprised to find there was only one at 8.30am and another at 5.30pm, but trains nearly on the hour, hotel to hotel journey time was similar and the train cheaper....i just don't think the market is there for MAN. I think the APD is too much of a killer.

I think the only viable domestic flights are flown by Easyjet already. Goof luck though!

TrustedApple

kevinandrew wrote: »

My last experience with British Airways long haul was 2017 in World Traveller Plus, the overall product and service delivery was already on the slide and had deteriorated considerably on my previous journey with them two years before that so it's unsurprising to hear the recent reviews are less than favourable. 

Virgin Atlantic on the other hand has always, always valued its image as a young, sexy competitor over everything else, even profits! Virgin Atlantic has mastered the ability to make its staff, particularly cabin crew, feel like they are part of something special and it shows in their work ethic. The product is also pretty decent, they have distinctive red cabins with glossy finishes and mood lighting everywhere you look so it always feels "on brand" no matter the cabin you travel in. The 'Upper Class' seat is really dated at this point though, it's narrow, lacks privacy and storage and the seat blocks any natural light from entering the cabin. The service is wonderful though, the IFE and food has always been great and there will be a new seat on the A350-1000 later this year. 

Unfortunately none of those bells and whistles you find on Virgin Atlantic has ever translated into big profits for the airline, their financial performance ranges from mediocre to woeful. It's a very small airline, it carries about 5.5m passengers a year, has 40 aircraft and about 30 destinations. It's far from a powerhouse in aviation but does have good backers in Delta and has a very strong brand and that's what they'll be relying on to help turn the Flybe ops around and into the ideal feeder airline for them, along with Stobart's so called expertise in regional flying. 

I personally think this new venture has a very uphill battle, nobody has been able to make UK domestic or regional operations work in years and I'm not sure Stobart taking over operational responsibility and Virgin slapping their livery on a handful of Bombardiers is going to suddenly produce the results nobody else could. The refocus on Manchester could have potential, it may even pose a minor threat to IAG and the Aer Lingus hub at Dublin but at the same time Virgin will never want to pull focus away from the higher yielding operation at Heathrow while Stobart is still intent on pushing its Southend agenda and the Carlisle experiment, both totally irrelevant to Virgin's business so there's a lot of strategy to still work out going forward.

I traveled WTP twice in the last year. The 1st time was great was on a old 747 but was right in the front of the cabin I had loads of room, comfy seat, nice food and drinks was worth the upgrade.

Traveled again in it last year jeses the 777ER is nasty in WTP. Food was bad, service was so bad that I had to look for staff to get another drink or something else small to eat. I was quite disappointed with everything.

So I hope virgin does well with flybe as I am due to fly with flybe in a few weeks on one of there small jets so at lest now I know the flight will be running!!!

rivegauche

FlyBE being transferred to Stobart/Virgin/Cyrus consortium or whatever they are called and bankers
FlyBE is done for despite protestations by Quisling Board of Directors and new owners to the contrary.
They don't want to maintain low profit flights to the regions in competition to Virgin Trains amongst others.
Pilots should be sending CVs anywhere they can now even if it means switching seats temporarily rather than wait to be called in for a chat by HR of course that will suit HR but it is better to go at a time of your choosing than at a time of their choosing.