Just an additional point on the finances of FLYBE; they have around £150m of debt made up of around £130m long term and around £20m short term, the latter was getting increasing difficult for the company to refinance hence why there was an immediate cash injection (loan) of £20m, without that they wouldn't have been able to operate in the short term and hence why the sale price starts to make sense (along with the £130m of long term debt that the consortium will take on).

Also, additional cash flow of £4.5m has been raised by FLYBE, this announced just before mkt close today (11 Jan).

Flybe Group PLC ("Flybe" or the "Group")

Slot Transaction at Gatwick Airport

Flybe Group plc announces that today Flybe Limited, a wholly-owned subsidiary, signed an agreement with Vueling Airlines S.A. (the "Agreement") to receive a total of £4,500,000 (four-and-a-half-million pounds) in respect of slots at London Gatwick Airport. The funds will be paid in two tranches, being receivable in the next few days in respect of slots to be used during the Summer Season in 2019 and for subsequent Summer Seasons. The remainder is due in June 2019 in respect of slots to be used during the Winter Season in 2019/20 and subsequent Winter Seasons.


@MODS, please may the title be amended? VS will be a 30% holder along with Stobart Group. Cyrus Capital will own the remaining 40%. Note all subject to shareholder approval.

CarbonFibre wrote:

Skyliner report the new airline will be called flyV. Not seen this mentioned elsewhere.

http://www.skyliner-aviation.de

I can't see any mention of this 'flyV' brand anywhere. The press release specifically mentions "Virgin Atlantic" as the brand. It seems pointless if flyBe UK is going to operate as Virgin Atlantic, rather than a quasi-independent sister brand, like Pacific Blue and VAustralia were. The new parent entity is Connect Airways. Connect Airways is an odd choice for a holding company and implies operation under that name. If there is any renaming I would expect Connect Airways to be used, it is sufficiently bland but descriptive of what RE and BE do, while not being tied to a specific country or parent. "Virgin Atlantic/Aer Lingus Regional/SAS, operated by Connect Airways"

Possible outcomes;

Flybe
- Connectivity to VS hub in MAN and GLA from the regions, along with routes into LHR from EDI/ABZ/NQY and possibly MAN for Asia/South Africa routes, as well as DL routes.

Given MAN's central location in the UK, "double drop" routes could prove viable. Purely an example - CWL-MAN-ABZ, providing CWL/ABZ for connections, but also CWL-ABZ-CWL as an add on.

- Regional bases reviewed and controlled by Stobart, trimming unprofitable routes and maybe even bases. Stobart have wanted to grow and this is their perfect chance to take control. Grow SEN as a focus, but also concentrate on regional bases like SOU, BHD, EDI and BHX, along with fine tune smaller bases like CWL and DSA. Stobart were probably brought in to control the regional flying so VS can manage it at arms length, thus avoiding a repeat of Little Red, otherwise VS would've bought BE outright.

Closer working with parnet Airlines, AF/KL & DL. Improve connectivity to CDG and AMS, which could potentially free up slots & aircraft at CDG & AMS for AF/KL to open up new routes within Europe


Blue Islands / Eastern Airways

Continue as franchise parnets under the VS brand or go it alone again. Eastern don't really offer much for regional flying in the UK anymore and have an ageing fleet. Eastern & Blue Islands could merge and operate as an independant Airline. The concern there would be going up against BE/VS regional flying.

I think if I was in charge of Flybe following acquisition I would probably look to shave these UK airports from the route network..
-Bristol, in favour of Cardiff (already duplication)

Flybe don't operate scheduled services out of BRS. It's Blue Islands that operate BRS-JER, so all depends how that relationship works out. CWL/BRS - JER is the only duplication of BE branded routes between the 2 airports.

konkret wrote:

Stobart Air is also to be included in the new venture - what effect could it have on its flights operated for EI?
Will the VS owned airline operate flights to feed IAG’s hub in DUB?

It has been stated that the Stobart Air franchise operations etc will not change. Stobart will continue to operate for Aer Lingus Regional with no changes at all.

BrianDromey wrote:

CarbonFibre wrote:

Skyliner report the new airline will be called flyV. Not seen this mentioned elsewhere.

http://www.skyliner-aviation.de

I can't see any mention of this 'flyV' brand anywhere. The press release specifically mentions "Virgin Atlantic" as the brand. It seems pointless if flyBe UK is going to operate as Virgin Atlantic, rather than a quasi-independent sister brand, like Pacific Blue and VAustralia were. The new parent entity is Connect Airways. Connect Airways is an odd choice for a holding company and implies operation under that name. If there is any renaming I would expect Connect Airways to be used, it is sufficiently bland but descriptive of what RE and BE do, while not being tied to a specific country or parent. "Virgin Atlantic/Aer Lingus Regional/SAS, operated by Connect Airways"

It was mentioned by Flight Global -

"Corporate registry records indicate that during November, just a few days after Virgin Atlantic confirmed discussions over a possible Flybe acquisition, a number of similar UK companies – including the names ‘FlyVE’ and ‘FlyV’ – were set up, specifying their business as “scheduled air transport”.

Virgin are not the biggest shareholder.
The group will operate independently to UK long-haul carrier Virgin Atlantic under one management team and will be 40% owned by Cyrus Capital, 30% by Stobart Aviation—a wholly owned subsidiary of Stobart Group—and 30% by Virgin Atlantic Ltd.

Fly Virgin was also registered, but all of them in Hitchin, rather than London for Connect Airways.

Its not just that Virgin have had such a poor history on short haul, but the main bulk of flyBe is the remnants of BA Connect which BA could never make profitable. Handing it over to flyBe with a stake (which they later sold off), under independant ownership was supposed to be easier with signing codeshares - but that plan seems to have failed as well. There are very few success stories you can make from any part of this deal.

None of these registered companies are anything to do with Virgin, it's just someone speculating on what the name is going to be.

Personally I think FlyV is an awful name, Virgin European seems the most obvious.

BrianDromey wrote:

CarbonFibre wrote:

Skyliner report the new airline will be called flyV. Not seen this mentioned elsewhere.

http://www.skyliner-aviation.de

I can't see any mention of this 'flyV' brand anywhere. The press release specifically mentions "Virgin Atlantic" as the brand. It seems pointless if flyBe UK is going to operate as Virgin Atlantic, rather than a quasi-independent sister brand, like Pacific Blue and VAustralia were. The new parent entity is Connect Airways. Connect Airways is an odd choice for a holding company and implies operation under that name. If there is any renaming I would expect Connect Airways to be used, it is sufficiently bland but descriptive of what RE and BE do, while not being tied to a specific country or parent. "Virgin Atlantic/Aer Lingus Regional/SAS, operated by Connect Airways"

So far, from the VS media news page, they state that they plan to utilise VS brand and to have the experience that is in keeping of VS heritage, so I don't see "FlyV" being used, besides sounds kind of tacky. They're turboprop planes, not B787 flying to Las Vegas. Now I can visualise by the doors and safety cards, it may mention "Virgin Atlantic, operated by Connect Airways"; but the livery, uniform and cabin will probably styled in VS, taking into account the limitations of Q400 seats/cabin.

Source: https://www.virginatlantic.com/gb/en/media-centre/press-releases/enhanced-connectivity-to-uk-regions.html

Stobart Group is part of the consortium that bought Flybe. Stobart also owns two E195s that Flybe has recently returned to it as Stobart was the lessor, and there is also one other E195 wet-leased to Flybe. (Six other E195s are leased from Falko.) Might the three Stobart-owned E195s be returning to Flybe? (I could also see Stobart being the major lessor for this new airline.)

"FlyVD". No, bad idea.

konkret wrote:

Stobart Air is also to be included in the new venture - what effect could it have on its flights operated for EI?
Will the VS owned airline operate flights to feed IAG’s hub in DUB?

The offer documents state that the activities of Stobart Air will continue under its own separate Irish AOC with its current franchise and leasing operations.

"There will be no change to the brands under which Stobart Air flies today which will continue to be maintained and operated separately.”

Stobart needs the Aer Lingus Regional franchise, they've recently applied to have the 10 year deal extended for another 3 years past the 2022 end date. Unfortunately for Stobart the franchise is being eyed by another newly formed regional airline group consisting of CityJet and Air Nostrum with their startup Hibernian Airlines which has openly expressed its desires to bid for the deal when the time comes. Hibernian Airlines received its Irish AOC a few days ago.

First thing that will happen is the refinancing of BE's liabilities.Get some of those backbreaker leases terminated at the earliest opportunity and bring in more suitable aircraft where possible.

As the excess Embraers and Q400s leave I can see an ATR order in the near term. The ATR72-600 is a much better prospect and has a more comfortable ride. VS has always been known for having a good team of acquisition specialists and their expertise will help negotiate (or re-negotiate) leases away from BE's subprime financing.

Interesting options do start coming to mind, such as SEN-MAN-JFK through ticketing avoiding LHR or SOU-GLA-MCO. There has to be sufficient upside in this deal or it wouldn't be happening.

Channex757 wrote:

First thing that will happen is the refinancing of BE's liabilities.Get some of those backbreaker leases terminated at the earliest opportunity and bring in more suitable aircraft where possible.

As the excess Embraers and Q400s leave I can see an ATR order in the near term. The ATR72-600 is a much better prospect and has a more comfortable ride. VS has always been known for having a good team of acquisition specialists and their expertise will help negotiate (or re-negotiate) leases away from BE's subprime financing.

Interesting options do start coming to mind, such as SEN-MAN-JFK through ticketing avoiding LHR or SOU-GLA-MCO. There has to be sufficient upside in this deal or it wouldn't be happening.

Virgin Australia’s ATR interior do look better and far more comfortable than FlyBE’s Q400.

I think 'VIrgin Connect' would be a good name for the revamped airline, as for the current franchise agreements with Eastern & Blue Islands, I would think that they might continue for the short term but be terminated at the end of the current agreements.

Is £100M of investment going to get you many new planes? More likely a load of second-hand ones. They could more easily cut the fat and put the current Q400 fleet through a thorough upgrade.. I'm curious to see what they'll do

I don't see any big fleet purchasing within that investment, maybe they will buy frames as they come off lease to bring the finance costs down.

I expect it will be more like:

Refurb/another new paint job on the existing frames.
New uniforms etc, Branson dressing up in the uniforms, people talking about if it's still OK for him to do that.
Lounges etc.

Then reorganisation costs - consolidate some back office functions under VS - Marketing/Ticketing/Website etc.

Surely this justifies VS to put a lounge into Manchester Airport too?

Personally, I would like to see London Heathrow and Manchester operations called Virgin Connect, and the rest of the operations called Stobart and operated under Stobart. Companies such as Eastern Airways and Blue Islands could then franchise under the Stobart brand, and therefore be a division between connecting onto Virgin Atlantic services and having UK connections.

I would also remove the European network, and focus on connecting the UK regions and maybe to Republic of Ireland. This would mean significant cuts to airports such as Southampton and Exeter, but other operators would probably pick them up. Also, having Air France connecting Paris flights and KLM onto Amsterdam (as they will own parts of Virgin Atlantic) will help customers understand branding and have one airlines for their connections.

In addition, I would also like to see "Virgin Connect" replace Air France and KLM on approximately 3-4 daily flights between London Heathrow and Paris Charles de Gaulle/Amsterdam, meaning a pure transitioning of slots between the Air France KLM Delta Virgin alliance and not a new airline launching these routes. I also think the four airlines should be under one roof, probably at Terminal 2, to allow for domestic flights, which should have some sort of expansion opening in the next few years

SeanM1997 wrote:

Personally, I would like to see London Heathrow and Manchester operations called Virgin Connect, and the rest of the operations called Stobart and operated under Stobart. Companies such as Eastern Airways and Blue Islands could then franchise under the Stobart brand, and therefore be a division between connecting onto Virgin Atlantic services and having UK connections.

I would also remove the European network, and focus on connecting the UK regions and maybe to Republic of Ireland. This would mean significant cuts to airports such as Southampton and Exeter, but other operators would probably pick them up. Also, having Air France connecting Paris flights and KLM onto Amsterdam (as they will own parts of Virgin Atlantic) will help customers understand branding and have one airlines for their connections.

In addition, I would also like to see "Virgin Connect" replace Air France and KLM on approximately 3-4 daily flights between London Heathrow and Paris Charles de Gaulle/Amsterdam, meaning a pure transitioning of slots between the Air France KLM Delta Virgin alliance and not a new airline launching these routes. I also think the four airlines should be under one roof, probably at Terminal 2, to allow for domestic flights, which should have some sort of expansion opening in the next few years

Why on earth would you get rid of the Flybe brand for Stobart Air? Most of the UK won’t even realise Stobart Air exist. There’s no brand image there whatsoever. They paid Flybe to use the Flybe brand instead of their own.

bmibaby737 wrote:

SeanM1997 wrote:

Personally, I would like to see London Heathrow and Manchester operations called Virgin Connect, and the rest of the operations called Stobart and operated under Stobart. Companies such as Eastern Airways and Blue Islands could then franchise under the Stobart brand, and therefore be a division between connecting onto Virgin Atlantic services and having UK connections.

I would also remove the European network, and focus on connecting the UK regions and maybe to Republic of Ireland. This would mean significant cuts to airports such as Southampton and Exeter, but other operators would probably pick them up. Also, having Air France connecting Paris flights and KLM onto Amsterdam (as they will own parts of Virgin Atlantic) will help customers understand branding and have one airlines for their connections.

In addition, I would also like to see "Virgin Connect" replace Air France and KLM on approximately 3-4 daily flights between London Heathrow and Paris Charles de Gaulle/Amsterdam, meaning a pure transitioning of slots between the Air France KLM Delta Virgin alliance and not a new airline launching these routes. I also think the four airlines should be under one roof, probably at Terminal 2, to allow for domestic flights, which should have some sort of expansion opening in the next few years

Why on earth would you get rid of the Flybe brand for Stobart Air? Most of the UK won’t even realise Stobart Air exist. There’s no brand image there whatsoever. They paid Flybe to use the Flybe brand instead of their own.

No, they will use a Virgin brand.

Will Connect Airways be the holding company for both RE and BE? Can’t see them launching Connect Airways as a brand as it has no public recognition, nor does Stobart Air.

I imagine Stobart Air (RE) will continue to fly under their AOC for Aer Lingus Regional, keeping EI brand as required for that contract with EI.

The rest, hopefully, will rebrand as Virgin Atlantic or a variation of that, e.g. Virgin Atlantic Connect, Virgin Atlantic Regional, using the flybe (BE) AOC, i.e. BE flying for... / operated by BE... . It would be good to have a consistent brand that the public recognise and one that can build on existing VS loyalty base. I can’t imagine there’s a case to keep the flybe brand fleet running alongside VS branded ‘connect’ fleet: BE haven’t been consistent with their look and the brand is tarnished “flymaybe”. A common branded fleet would give more flex in the BE network (whatever that might look like post buyout). At least Virgin is widely recognised for marketing and having one look to the Connect fleet, perhaps one booking engine website (VS), one loyalty scheme (VSFC) - this is the opportunity to start fresh.

Will Virgin branded, BE operated flights fly using their existing BE code with VS codeshare for the connecting tickets?

As for MAN ops, the current T2-T3 setup between VS/BE and lack of Clubhouse will hopefully be sorted through the opportunity of the new terminal and the rebrand of BE to VS. Fingers crossed, this could be something really good.

jem2000 wrote:

I think 'VIrgin Connect' would be a good name for the revamped airline, as for the current franchise agreements with Eastern & Blue Islands, I would think that they might continue for the short term but be terminated at the end of the current agreements.

I don't see Virgin Connect as a name for an airline but as a brand within Virgin Atlantic. Just as Iberia Regional, American Eagle, Aer Lingus regional or any other regional scheme. Branding, res, tkt, flight codes from the major and the "operated by" record filed with the actual name of the airline which would be quite different from the major:
Iberia regional operated by Air Nostrum
Aer Lingus Regional operated by Stobart Air
American Eagle operated by Envoy

This case, should FlyBE becomes a Virgin franchisee, could be something like Virgin Connect operated by Flybe. Let's say they do it for LHR and Man flights in a first phase. They would fly these routes under the VS code and won't sell the tickets themselves but VS commercial channels and passengers could use VS FF scheme or any other VS partner.
On the other side, nothing prevents FlyBE flying and selling BE-coded tickets flown by. FlyBE, Eastern or Blue Island. These would be sold by FlyBE sales channels and could use BE or BE partners FF schemes

That is, of course, if Virgin Atlantic and let's call it NewFlyBE both want to enter a franchise feeder Scheme. Being two independent airlines with two AOC and different shareholders and management teams, they might even not reach an agreement for codesharing or even interlining. Having a small percentage of the company (30%) doesn't automatically makes it part or virgin Atlantic group or forces them to operate under VS umbrella. But certainly there are some synergies to explore there.

Would just doing feeder flights make them any money? BMI couldn't make it work. This isn't a full takeove/mergerr and intergation into Virgin Atlantic and it will still have to make money on its own for the other partners who will hold 70% of the company. If they go down that route then they might as well have mergedp in the first place and drop the vast majority of the routes that are losing money.

If this was solely to feed into VS flights, primarily into MAN because of LHR and LGW slots, their fleet utilisation would be terrible. The majority of VS flights currently from MAN are in the morning up to lunchtime. Any connections would need to arrive early/mid morning to connect with departures and a realistic waiting time from arrivals. Any expansion from VS early on is likely to be to the US, so not much need for afternoon/evening flights and pretty much only one, possibly two banks of connecting flights in the AM. So no feed needed later in the day. This is why keeping current (non feed) domestic and european flights would be needed to keep the aircraft being used. Feeder routes don't offer much profit to the feeder airline, but do to the parent airline. VS/RE realistically need to keep the profitable regional and domestic routes to boost financial performance.

caaardiff wrote:

If this was solely to feed into VS flights, primarily into MAN because of LHR and LGW slots, their fleet utilisation would be terrible. The majority of VS flights currently from MAN are in the morning up to lunchtime. Any connections would need to arrive early/mid morning to connect with departures and a realistic waiting time from arrivals. Any expansion from VS early on is likely to be to the US, so not much need for afternoon/evening flights and pretty much only one, possibly two banks of connecting flights in the AM. So no feed needed later in the day.

Has the penny dropped with you yet. This deal is clearly not in the interests of the Shareholders but Staff and the regions are being led to believe it is good for them. It isn't good for them either. The airline will be eviscerated. Management should go for voluntary liquidation if they can't get another bidder to the table and to be honest another bidder would probably be IAG who would do the same thing as Virgin/Stobart.

leghorn wrote:

caaardiff wrote:

If this was solely to feed into VS flights, primarily into MAN because of LHR and LGW slots, their fleet utilisation would be terrible. The majority of VS flights currently from MAN are in the morning up to lunchtime. Any connections would need to arrive early/mid morning to connect with departures and a realistic waiting time from arrivals. Any expansion from VS early on is likely to be to the US, so not much need for afternoon/evening flights and pretty much only one, possibly two banks of connecting flights in the AM. So no feed needed later in the day.

Has the penny dropped with you yet. This deal is clearly not in the interests of the Shareholders but Staff and the regions are being led to believe it is good for them. It isn't good for them either. The airline will be eviscerated. Management should go for voluntary liquidation if they can't get another bidder to the table and to be honest another bidder would probably be IAG who would do the same thing as Virgin/Stobart.

And what benefit would that be to VS?

there are only a handful of routes that interest them. The rest will be gone along with most of the employees of FlyBE.

Which goes back to my point, how can VS make full utilisation out of the fleet to benefit them when the majority of their flights outside of LHR are in the morning?
Why buy an airline with around 80 aircraft and trim it back to a handful of routes and aircraft? Surely it would be better to have just got stobart to run some ATRs for them and pick up the slots when flybe closed down?
Not forgetting that VS are also only 30% of the whole thing.

They don't have 80 aircraft. They have around 78 and reducing as leases end. They own 7 or 8 of them.
They get a functioning airline with 750 million turnover with load factors that are fairly good on the main routes they are interested in and you are saying "Wait, I've got an idea let us start up duplicate routes in competition with them."
they'll do a pareto distribution on it and keep the 20% of lines that are most profitable and ditch the rest.

Does the MAN operation really require feed though? JFK and ATL are all about feeding the DL hubs and MCO, BGI and LAS are all point to point all suppress by Virgin Holidays. Would VS really go for an airline just to feed a few seasonal LAX and BOS flights?

BHXflyinghigh wrote:

Does the MAN operation really require feed though? JFK and ATL are all about feeding the DL hubs and MCO, BGI and LAS are all point to point all suppress by Virgin Holidays. Would VS really go for an airline just to feed a few seasonal LAX and BOS flights?

I wouldn't expect the MAN base to stand still for very long. With AMS maxing out flights, VS's other bosses at AFKL Group would probably like to reduce the number of AMS slots used for UK regional connections. Building up a connecting hub at MAN (and/or BHX, and/or GLA) to feed European and Transatlantic flights, is growth that can't directly happen at the moment at any of LHR, LGW, or AMS, and is within easy NB range of DL hubs at JFK, BOS, and DTW. Not that VS has NBs, TATL-capable or otherwise at the moment, but DL certainly does. But as exciting as that prospect is, the real win is to consolidate low-volume UK regional flights for domestic travel, and for economic access to slot-controlled European destinations, on behalf of the Skyteam airlines that dominate those airports.

The same motive would apply to an IAG bid for BE, only with focus on EI and DUB rather than KL and AMS.

VS press release (link at the footer) states as follows:

“The Combined Group will offer significant benefits for customers:

* Deliver more choice to customers by linking UK regions and Ireland to Virgin Atlantic’s extensive long-haul network through improved connectivity at Manchester Airport and London Heathrow

* Provide a strong foundation to secure the long-term future of Flybe, its customers and its people by leveraging the combined commercial, operational and functional expertise and scale of Virgin Atlantic and Stobart Group

* Utilise the strength of the Virgin Atlantic brand, and the offer of an enhanced customer experience in keeping with Virgin Atlantic’s heritage

* Provide the Combined Group with an enhanced presence at Manchester Airport , London Heathrow Airport, with the potential to grow further in London Southend Airport”

To my mind what they see as the core benefits of the tie up and how to go about realising those benefits is clear. I agree that outside of MAN and LHR there is less certainty on the plans and there is scope for realistic debate on this subject matter.

However, I’ve seen (here and on other platforms) a number of arguments that directly contradict the publicly and explicitly stated objectives, some of which rely on purported facts which are clearly speculative and possibly fabricated.

To me that is not grounded in reality and feels like wishful thinking.


https://www.virginatlantic.com/gb/en/me ... campid=237

BHXflyinghigh wrote:

Does the MAN operation really require feed though? JFK and ATL are all about feeding the DL hubs and MCO, BGI and LAS are all point to point all suppress by Virgin Holidays. Would VS really go for an airline just to feed a few seasonal LAX and BOS flights?

Given VS have specifically stated that buying Flybe is to feed the MAN (and LHR) operation. Then yes, yes they do. That’s why they are making these sorts of decisions and your posting on a forum, they clearly have access to a lot more information and it’s about the future.

caaardiff wrote:

leghorn wrote:

caaardiff wrote:

If this was solely to feed into VS flights, primarily into MAN because of LHR and LGW slots, their fleet utilisation would be terrible. The majority of VS flights currently from MAN are in the morning up to lunchtime. Any connections would need to arrive early/mid morning to connect with departures and a realistic waiting time from arrivals. Any expansion from VS early on is likely to be to the US, so not much need for afternoon/evening flights and pretty much only one, possibly two banks of connecting flights in the AM. So no feed needed later in the day.

Has the penny dropped with you yet. This deal is clearly not in the interests of the Shareholders but Staff and the regions are being led to believe it is good for them. It isn't good for them either. The airline will be eviscerated. Management should go for voluntary liquidation if they can't get another bidder to the table and to be honest another bidder would probably be IAG who would do the same thing as Virgin/Stobart.

And what benefit would that be to VS?

Its not about benefit to VS, its about fair treatment of the shareholders.

On Thursday they were led to believe that a fair valuation of Flybe was 16 pence per share, this valuation was arrived at by market analysts on the basis of the financial information issued by the existing management. Then on Friday morning the management announced that a consortium had put forward an offer of 1p per share and they were recommending acceptance. Usually take over offers are at around a 25% premium to the existing share price, on the basis that the people making the offer want the business as they feel they could manage it better than the existing management and duly make more profit.

The conclusion has to be that either the existing management were failing to report the true financial state of the business, or that they have recommended an offer that is far too low. In both cases they have failed the shareholders whose interests they were paid to protect.

Shareholders might as well reject the offer, it is pitiful and if the business is closed down they might even be better off.

DobboDobbo wrote:

VS press release (link at the footer) states as follows:

“The Combined Group will offer significant benefits for customers:

* Deliver more choice to customers by linking UK regions and Ireland to Virgin Atlantic’s extensive long-haul network through improved connectivity at Manchester Airport and London Heathrow

* Provide a strong foundation to secure the long-term future of Flybe, its customers and its people by leveraging the combined commercial, operational and functional expertise and scale of Virgin Atlantic and Stobart Group

* Utilise the strength of the Virgin Atlantic brand, and the offer of an enhanced customer experience in keeping with Virgin Atlantic’s heritage

* Provide the Combined Group with an enhanced presence at Manchester Airport , London Heathrow Airport, with the potential to grow further in London Southend Airport”

To my mind what they see as the core benefits of the tie up and how to go about realising those benefits is clear. I agree that outside of MAN and LHR there is less certainty on the plans and there is scope for realistic debate on this subject matter.

However, I’ve seen (here and on other platforms) a number of arguments that directly contradict the publicly and explicitly stated objectives, some of which rely on purported facts which are clearly speculative and possibly fabricated.

To me that is not grounded in reality and feels like wishful thinking.


https://www.virginatlantic.com/gb/en/me ... campid=237

True, as per the announcement VS expect the acquisition to add connectivity in UK and Ireland, so we are talking about a couple of extra routes at most here out of MAN and LHR.

Very little has been said about European routes other than that they expect to feed CDG and AMS hubs in the future.

Given that they have allowed the LGW slots to be sold I would say there is no interest in adding connectivity or expansion there. There is also the mention of growth at Southend, could this see London services split between Healthrow, London City and Southend in the future, cutting out Gatwick?

Bongodog1964 wrote:

The conclusion has to be that either the existing management were failing to report the true financial state of the business, or that they have recommended an offer that is far too low. In both cases they have failed the shareholders whose interests they were paid to protect.

Shareholders might as well reject the offer, it is pitiful and if the business is closed down they might even be better off.

Is it a full 100% take over offer? I don’t know the details of the British law commanding take overs, mergers... did the consortium set a minimum acceptance to proceed? What happens if it’s accepted by 65% of shareholders? Could they go ahead being the principal shareholder?

User001 wrote:

BHXflyinghigh wrote:

Does the MAN operation really require feed though? JFK and ATL are all about feeding the DL hubs and MCO, BGI and LAS are all point to point all suppress by Virgin Holidays. Would VS really go for an airline just to feed a few seasonal LAX and BOS flights?

Given VS have specifically stated that buying Flybe is to feed the MAN (and LHR) operation. Then yes, yes they do. That’s why they are making these sorts of decisions and your posting on a forum, they clearly have access to a lot more information and it’s about the future.

I would think having feeds would ALLOW VS to grow MAN as a hub.

Does anyone know for sure what the position is with KLM and feed partners into Amsterdam ? I can’t see Flybe continuing to fly MAN and BHX to AMS in competition to KL but seem to recall there is some union limit on partner KL flying at AMS which might limit their ability to move those slots elsewhere (eg NWI, HUY, MME) to take over existing KLC flying for growth elsewhere. It would be useful to know the position if anyone happens to have clear info.

thekorean wrote:

User001 wrote:

BHXflyinghigh wrote:

Does the MAN operation really require feed though? JFK and ATL are all about feeding the DL hubs and MCO, BGI and LAS are all point to point all suppress by Virgin Holidays. Would VS really go for an airline just to feed a few seasonal LAX and BOS flights?

Given VS have specifically stated that buying Flybe is to feed the MAN (and LHR) operation. Then yes, yes they do. That’s why they are making these sorts of decisions and your posting on a forum, they clearly have access to a lot more information and it’s about the future.

I would think having feeds would ALLOW VS to grow MAN as a hub.

I think that is the key part as in reality Virgins MAN operation is very small and a lot of it beach destinations. Being part of a consortium owning Flybe will help them grow MAN as possibly the Skyteam version of DUB and it may be possible that they will pass on the beach routes to it to be operated in the low cost model ie buy onboard and lower wage costs. With Heathrow there is little scope to build and any slots are far too valuable for short haul routes but it does give them a chance in a decade or 2s time if runway 3 is ever built. As for the rest of the network it's possible they'll look at carrying on what Flybe has been doing and trimming it but i don't see why they would drop it altogether. Some bases might be closed or they might be franchised out to the likes of Eastern. In the long term i wouldn't be surprised if they convert the fleet to all jet either the A220 or maybe the E175. Guess it's a case of wait and see if the shareholders accept the offer!

Aisak wrote:

Bongodog1964 wrote:

The conclusion has to be that either the existing management were failing to report the true financial state of the business, or that they have recommended an offer that is far too low. In both cases they have failed the shareholders whose interests they were paid to protect.

Shareholders might as well reject the offer, it is pitiful and if the business is closed down they might even be better off.

Is it a full 100% take over offer? I don’t know the details of the British law commanding take overs, mergers... did the consortium set a minimum acceptance to proceed? What happens if it’s accepted by 65% of shareholders? Could they go ahead being the principal shareholder?

It will go to a shareholder vote, 50% + 1 share is the threshold under UK law.

It's a reality that the UK is much more than just London and BE offers the opportunity to capitalise on that.
VS can secure the feed at MAN if they get any from BE.
Also, DL could take a look at a JFK-BHX flight. There could be enough demand for a daily B757/B767 with BE feed.

Feeding LHR, ok but with what slots? Can VS claim the Virgin Red slots back?

Bongodog1964 wrote:

It will go to a shareholder vote, 50% + 1 share is the threshold under UK law.

75% needed to pass a special resolution

They'll get their 75% unless another party places a better offer which forces the Directors to present it to the shareholders. That seems unlikely at this stage and a huge percentage of the shares of the company transferred ownership on Friday. A lot of this would have been due to stop-loss. Offering 2.2m for the company didn't drop the share price beyond the stop-loss limits. Board of Directors recommending it caused the crash in share price. Supposedly the BoD are paying for expensive advice regarding sale of the company so their advisers must have known that this would have happened.

Waterbomber wrote:

Also, DL could take a look at a JFK-BHX flight. There could be enough demand for a daily B757/B767 with BE feed.

Feed from where? Airports that already have DL/AF/KL/VS non-stops or 1-stops to the U.S.? The record of non-LON/MAN from England to the U.S. is very poor.

These slot sales from a few years ago required stockholder approval but there is no mention of stockholder approval for the slot sales to Vueling last Friday
https://www.telegraph.co.uk/finance/new ... r-20m.html

Waterbomber wrote:

Feeding LHR, ok but with what slots? Can VS claim the Virgin Red slots back?

You mean the slots BE are using for EDI and ABZ already? Sure, claim them back from themselves...

MIflyer12 wrote:

Waterbomber wrote:

Also, DL could take a look at a JFK-BHX flight. There could be enough demand for a daily B757/B767 with BE feed.

Feed from where? Airports that already have DL/AF/KL/VS non-stops or 1-stops to the U.S.? The record of non-LON/MAN from England to the U.S. is very poor.

Having a bit of BE feed at U.K. Stations worked for pmCO to NY, if DL have a spare 752 that could do it, it may well work.

Bhoy wrote:

Waterbomber wrote:

Feeding LHR, ok but with what slots? Can VS claim the Virgin Red slots back?

You mean the slots BE are using for EDI and ABZ already? Sure, claim them back from themselves...

MIflyer12 wrote:

Waterbomber wrote:

Also, DL could take a look at a JFK-BHX flight. There could be enough demand for a daily B757/B767 with BE feed.

Feed from where? Airports that already have DL/AF/KL/VS non-stops or 1-stops to the U.S.? The record of non-LON/MAN from England to the U.S. is very poor.

Having a bit of BE feed at U.K. Stations worked for pmCO to NY, if DL have a spare 752 that could do it, it may well work.

Indeed, I think that duplicate KL/AF/AZ flights will be rationalised and BE will be used to focus on domestic flights.
If you look at it, BE's domestic network in MAN is also not that spectacular.
I think that a mini reverse-hub system would work well for BHX and MAN.
Plenty of airports that could be used as gateways: LPL, SOU, BOH, among many others.

BA has long neglected these regional airports and this presents an opportunity.

DL could open up TATL routes but the other partners could also benefit from an integrated domestic network at these airports.

Waterbomber wrote:

Bhoy wrote:

Waterbomber wrote:

Feeding LHR, ok but with what slots? Can VS claim the Virgin Red slots back?

You mean the slots BE are using for EDI and ABZ already? Sure, claim them back from themselves...

MIflyer12 wrote:

Feed from where? Airports that already have DL/AF/KL/VS non-stops or 1-stops to the U.S.? The record of non-LON/MAN from England to the U.S. is very poor.

Having a bit of BE feed at U.K. Stations worked for pmCO to NY, if DL have a spare 752 that could do it, it may well work.

Indeed, I think that duplicate KL/AF/AZ flights will be rationalised and BE will be used to focus on domestic flights.
If you look at it, BE's domestic network in MAN is also not that spectacular.
I think that a mini reverse-hub system would work well for BHX and MAN.
Plenty of airports that could be used as gateways: LPL, SOU, BOH, among many others.

BA has long neglected these regional airports and this presents an opportunity.

DL could open up TATL routes but the other partners could also benefit from an integrated domestic network at these airports.

I think the point of principle is admirable, but I also think you should read the press release which should clarify a number of the points raised above.

Waterbomber wrote:

Also, DL could take a look at a JFK-BHX flight. There could be enough demand for a daily B757/B767 with BE feed.

I personally don’t see Delta putting a flight into BHX. The press releases issued by the airlines state that buying Flybe is primarily to strengthen LHR and MAN. You are not going to achieve that if you start diluting those catchments by putting in another flight half way between the 2 hubs of MAN/LHR.