A deal to sell troubled UK regional carrier Flybe to a consortium backed by Virgin Atlantic, Stobart Aviation and Cyrus Capital has been completed following approval by the European Commission. The main assets of Flybe Group - the airline, the maintenance division and the website - have been acquired by Connect Airways and in future will operated under the Virgin brand. Connect Airways paid £2.8m for the struggling airline's business, aircraft fleet and ground activities leaving Flybe plc as an empty shell which Connect also proposes to acquire, subject to shareholder approval, for £0.01 per share.
In a statement on Twitter, the airline said: "Today's confirmation of the sale of Flybe to Connect Airways secures an exciting future for our customers and employees as we continue to provide vital regional connectivity in the UK & beyond. Our confirmed schedule operates as normal..."
Flybe was formed from the merger of Jersey-based Intra Airways and Bournemouth-based Express Air Services. It commenced operations on November 1, 1979 as Jersey European Airways and became Europe's largest regional airline after it acquired most of the British Airways Connect network in 2006. The airline floated on the London Stock Exchange four years later when it was valued at £215m. The success raised funds that enabled the addition of new aircraft including Bombardier Q400s and Embraer E-Jets that replaced aging BAe 146s and Embraer 145s. The airline flew 76 aircraft and carried around 9m passengers per annum.
Over the past year the carrier has struggled with the board citing rising fuel prices, a weakening pound and Brexit as the primary causes. Last year losses were also incurred during a blistering battle for custom with its former partner Loganair on key routes in Scotland, and a costly IT systems upgrade.
Text © The Aviation Oracle