Aviation: Flybe - the saga continues
While directors at Flybe continue "discussions with strategic operators about a potential sale of the company", it has emerged that the beleaguered firm yesterday completed the sale of a major asset.
Hangar 1 of the New Walker Hangar, which forms part of the airline's headquarters, has been bought by Exeter & Devon Airport Ltd for £5m + VAT. The structure will be leased back to Flybe for a period of 25 years at a cost of £515,000 per annum. A statement to the stock markets says that proceeds from the transaction will be used for general working capital.
Meanwhile, Cardiff Airport's former head of marketing, Peter Phillips, has claimed that the loss of Flybe be would be "catastrophic" for the Welsh airport and for the country's economy. He has urged the government to offer help, "not buying the airline but... offering guarantee sweeteners to ensure any new owner ring-fences Cardiff Airport operations."
As mentioned by The Aviation Oracle two days ago, the demise of Flybe could have a far-reaching adverse implications for several UK regional airports where the airline is the major service provider. Phillips' comments exemplify these issues and put a focus on the value Flybe delivers by providing quick and affordable transport across the UK.
Of course it is by no means a foregone conclusion that Flybe will disappear - indeed the airline's management have already said that they are looking to make further cost cuts while also pursuing a possible merger or acquisition. However, Flybe has been struggling for years and whatever the outcome it seems that only drastic action will preserve part or all of it.
Shares, which have traded as high as £1.50, dropped precipitously in October when the airline issued a profits warning. By the time it revealed that talks over an acquisition had commenced they were priced at £0.12. Over the last two days a further decline to just £0.09 has taken place, which perhaps suggests the market doesn't foresee an overly rosy outcome.
Text © The Aviation Oracle