States gives cautious welcome to Flybe sale
FLYBE’S purchase by a consortium, including Virgin Atlantic, is likely to be good news for the islands, Economic Development president Charles Parkinson has said.
The troubled regional airline has been purchased by a consortium, including Virgin Atlantic and the Stobart Group, for £2.2m., just two months after Flybe issued a profit warning and was put up for sale.
The new owners have confirmed that a £20m. bridging loan will support Flybe’s ongoing operating costs, while a further £80m. will be provided to invest in the business and support its growth.
Deputy Parkinson welcomed the news.
‘We have to be cautious, as we don’t know the implications for Channel Island routes yet,’ he said.
‘But we very much hope the new owners will want to continue to work with us. The new owner will review the routes, but I think this is positive.
‘Flybe’s position had become financially unstable and there was a threat to the continued operation of the routes.’
The airline will be rebranded in due course to Virgin Atlantic. In a release, the new owners said customers would benefit from the deal, regional routes being linked with Virgin Atlantic’s services at Manchester and Heathrow airports.
The owners also plan to expand services at London Southend Airport, which is owned by the Stobart group. Flybe currently offers seven routes out of the airport, but none to the Channel Islands.
Flybe, which operates on some routes in a franchise partnership with Blue Islands, offers services between Guernsey and Jersey, Exeter, Birmingham and Southampton.
A Blue Islands’ spokesperson said the airline remains fully committed to serving the Channel Islands, and customers could continue to book all Blue Islands operated services at Flybe.com.
‘We look forward to working with the new combined group,’ they said.
Flybe’s CEO, Christine Ourmieres-Widener, said the airline was important for providing passenger feeder traffic for long-haul airlines.
‘We have successfully implemented a clear strategy in recent years focused on tighter fleet management, improving revenue per seat and increasing load factors,’ she said.
‘The pursuit of operational excellence has reduced maintenance times and increased efficiencies and customer satisfaction.
‘However, the industry is suffering from higher fuel costs, currency fluctuations and significant uncertainties presented by Brexit. We have been affected by all of these factors which has put pressure on short-term financial performance.
‘At the same time, Flybe suffered from a number of legacy issues that are being addressed but are still adversely affecting cashflows.
‘By combining to form a larger, stronger, group, we will be better placed to withstand these pressures. We aim to provide an even better service to our customers and secure the future for our people.’
A spokesman from Ports of Jersey agreed with Deputy Parkinson.
‘The announcement of a potential sale of Flybe is positive news in light of the recent challenges faced by the airline,’ he said.
‘It provides Flybe with future stability to continue to operate its extensive regional network, which includes Jersey thanks to the financial support and investment promised by a major consortium.’