Thu, 15 Apr 2021 | BUSINESS SALE
UK regional airline Flybe is due to relaunch this year after the sale of its assets and business to a new company affiliated with Cyrus Capital completed. The new owner, previously called Thyme Opco, will be renamed as Flybe Limited and is aiming to resume flights this summer.
Flybe was an early UK casualty of the COVID-19 pandemic, collapsing into administration at the beginning of March 2020 as demand for travel plummeted. Administrators from the restructuring division of EY were appointed to the company and struck a deal to sell the business and its assets to Cyrus Capital affiliate Thyme Opco in October 2020.
At the time, it was speculated that any relaunch would involve a considerable slimming down of the airline, which was previously Europe’s largest independent regional airline. Prior to its collapse, Flybe operated close to 40 per cent of the UK’s domestic flights and operated 210 routes between 15 countries, carrying around 8 million passengers annually.
Following the sale, there is yet to be any confirmation of how many routes will continue, but the company says it plans to resume “many” of its former routes. However, the launch of a large number of routes will be subject to COVID-19 travel restrictions lifting.
The sale includes Flybe’s valuable take-off and landing slots at various airports, but not its fleet of aircraft, which former owner Connect Airways (a consortium of Cyrus Capital, Virgin Atlantic and Stobart Group) mortgaged to lenders.
The transfer of Flybe’s airport slots to the new company could prove a sticking point in the relaunch. While in administration, Flybe was stripped of its operating licence in February by the Civil Aviation Authority, putting the slots under the control of administrators. While an appeal has been launched to overturn this, the slots will remain with administrators until a verdict is reached.
A spokesperson for Flybe said that the deal represented a “critical first step in our mission to accomplish the first-ever rescue of an insolvent British airline.”
The spokesperson added: "Subject to further success with vaccinations and relaxation of travel restrictions, we plan to launch a new and much improved Flybe sometime this summer on many of our former routes where there remains a critical need for a strong, reliable, and customer-focused airline.”
"While our company will initially be smaller than before, we intend to grow, create valuable jobs, and make significant contributions to essential regional connectivity in the UK and EU."
However, with around 90 per cent of Flybe’s former routes now covered by other operators, some have questioned how much of a market there will be for the relaunched company. 42 of its 46 former domestic routes have been restored by other airlines, with the viability of the four remaining routes under question due to a combination of seasonality and reliable rail alternatives.
Read about how COVID-19 is continuing to drive dealmaking in the travel sector.
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