It was reported on Thursday that a Virgin Atlantic-led consortium will announce a bid for Flybe on Friday morning.
This is a complex deal but, at the same time, there is a certain logic to it if the reports are correct.
Various sources state that it is a three-way bid comprising:
- Virgin Atlantic, which will be the majority shareholder
- Stobart Group, which is contributing assets but no cash
- a US private equity group, Cyrus Capital Partners
Stobart Group will be injecting its Stobart Air business into the new company. This already operates some Flybe routes under franchise. You may remember that Stobart Air was publicly considering a bid for Flybe in 2018 but did not go ahead.
Stobart Group also owns London Southend and Carlisle Lake District airports.
Virgin Atlantic gets to protect its codeshare operation which was feeding a lot of business to Virgin’s Manchester hub. Virgin is under huge pressure at Manchester from Thomas Cook’s long-haul operation and it can’t afford to lose connecting Flybe passengers.
Virgin will, presumably, also get first dibs on the Flybe slots at Heathrow. The use of these slots is restricted, but they can soon be used for any European destination, Moscow, Cairo or Riyadh. What Virgin will NOT be doing is trying to feed its Heathrow services with domestic connections, because only Terminal 2 and Terminal 5 can handle domestic flights and Virgin Atlantic is in Terminal 3.
Because this is a consortium bid, Flybe will presumably remain a standalone business. There is likely to be a new board but it should be business as usual for the rest of the staff.
There is a question over whether Avios continues to be used as Flybe’s loyalty currency. If Flybe is rebranded under a Virgin name there is zero chance, of course. If the Flybe brand is retained and Virgin’s investment remains just that – a fairly passive investment – then perhaps the Avios option will remain. Flybe believes that it drives passengers, but of course it is paying Avios Group a decent amount of money and Virgin Atlantic may prefer to keep that payment in-house by awarding Flying Club miles instead. It would also send an odd message about the position of the new Virgin Group Loyalty Company if Avios remained.
So …. lot’s going on. Let’s see what the official announcement brings.
How to earn Virgin Points from UK credit cards (January 2021)
As a reminder, there are various ways of earning Virgin Points from UK credit cards. Many cards also have generous sign-up bonuses!
You can choose from two official Virgin Atlantic credit cards (apply here, one has a bonus of 15,000 Points):
You can also earn Virgin Points from various American Express cards – and these have sign-up bonuses too.
(Want to earn more Virgin Points? Click here to see our recent articles on Virgin Atlantic and Flying Club and click here for our home page with the latest news on earning and spending other airline and hotel points.)