Airlines Virgin Atlantic and Stobart Group announce consortium to takeover Flybe
Virgin Atlantic and Stobart Air have announced to form a consortium named Connect Airways, that plans to acquire the regional carrier Flybe
According to the announcement, the new combined Group will operate independently to Virgin Atlantic under one management team, owned 40% by Cyrus Capital Partners, 30% by Stobart Aviation, a wholly owned subsidiary of Stobart Group, and 30% by Virgin Atlantic Limited, the holding company of Virgin Atlantic Airways and Virgin Holidays.
Concurrently with announcing the Acquisition, Cyrus, Stobart Group and Virgin Atlantic have committed to make available a £20 million bridge loan facility to support Flybe's ongoing working capital and operational requirements.
In addition, following completion of the Acquisition, Cyrus, Stobart Group and Virgin Atlantic are intending to provide up to £80 million of further funding to the Combined Group to invest in its business and support its growth, as well as a contribution of Stobart Air.
As part of the takeover, Flybe will be rebranded to Virgin Atlantic. The combined Group intends for Flybe to continue as an independent operating carrier with a separate UK Air Operator Certificate (AOC) under the Virgin Atlantic brand. Stobart Air is intended to continue under a separate Irish AOC.
Christine Ourmieres-Widener, CEO of Flybe stated “Flybe plays a vital role in the UK’s transport infrastructure with a UK regional network which uniquely positions it to benefit from growing demands from long haul carriers for passenger feeder traffic. We have successfully implemented a clear strategy in recent years focused on tighter fleet management, improving revenue per seat and increasing load factors. The pursuit of operational excellence has reduced maintenance times and increased efficiencies and customer satisfaction.”
The new consortium with the two regional airline partners Flybe and Stobart Air will have a significant market share for regional routes in the UK. The new cooperation could become part of a larger network. Together with the strategic partners AirFrance/KLM and Delta Air Lines, Virgin Atlantic would be able to coordinate transatlantic flights more closely and offer regional connections. Virgin was the only one of the three airlines not to have a regional feeder airline. With Flybe and the existing network, Virgin Atlantic will become a growing competitor for the IAG Group and British Airways. IAG also tried to acquire Flybe.
The British market experienced a wave of consolidation last year: Monarch Airlines and the new Primera Airlines both filed for bankruptcy and ceased operations. Flybe had also confirmed financial problems and was looking for an investor.
Source © virginatlantic.com