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Virgin Atlantic’s plans for Flybe revealed in the official scheme document

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HFP readers in the City may be interested in the formal scheme document for the sale of Flybe to a Virgin Atlantic-led consortium which was published yesterday.  You can download it here (PDF).

If you can wade through the technical pages, there is some interesting information on the state of the business, such as:

“In the absence of the Acquisition and the funding to be provided by the Connect Lenders, the Flybe Directors considered that neither Flybe nor the Flybe Subsidiaries would be able to continue to trade as going concerns. Even absent the Subsidiary Sale (described further below), were Flybe or the Flybe Subsidiaries to have been placed into administration, the Flybe Directors did not believe that an administrator would have been able to operate the business as a going concern and in such circumstances Flybe Shareholders would have been unlikely to have received any value in respect of their Flybe Shares.”

Note that all bolding in this article is mine and does not appear in the original document.

Sale completion is still expected by the long-stop date of 22nd February.

Flybe scheme document

In terms of day to day operation, these are the key paragraphs:

“Connect Airways intends to focus on three principal areas, in relation to the business of the Flybe Group:

simplifying and focusing on improving the performance of Flybe Limited’s core network whilst recognising the importance of regional connectivity;

adjusting Flybe Limited’s network to improve connectivity with Virgin Atlantic’s long-haul network, particularly at London Heathrow Airport and Manchester Airport, bringing more choice to customers; and

operating the Combined Group as an independent company, and optimising the combined commercial, operational and functional expertise and scale of Virgin Atlantic and the Stobart Group.

Optimising the Network and Improving Connectivity:

Connect Airways plans to optimise Flybe Limited’s network and operations to focus on key routes with the aim of continuing to enhance regional connectivity across the UK and Ireland.  Connect Airways also intends to bring benefits for customers through linking an enhanced Flybe regional network with Virgin Atlantic’s long-haul operations particularly at Manchester Airport and London Heathrow Airport.

Rebranding:

All flying operations except Stobart Air will operate under a Virgin brand to the extent possible. This will be timed to coincide with a refurbishment programme for Flybe Limited’s fleet to provide a seamless customer experience in keeping with Virgin Atlantic’s heritage.

There will be no change to the brands under which Stobart Air flies today which will continue to be maintained and operated separately.”

Separately it says:

Leveraging the expertise of Flybe, Stobart Group and Virgin Atlantic

Through the combination of Flybe and Stobart Air, and partnering with Virgin Atlantic, Connect Airways intends to continue as an independent operating carrier with a separate UK AOC under the Virgin Atlantic brand.  Stobart Air is intended to continue under a separate Irish Air Operator Certificate with its franchise and aircraft leasing operations as exists today.”

Elsewhere it says:

“The network and route optimisation will likely include a limited reduction in the number of Flybe Limited’s aircraft to right size the fleet for the Combined Group going forward.”

What about Flybe’s branding?

This is where it gets interesting, I think.

It was originally announced that the airline would be rebranded as Virgin Atlantic.  I thought this was not incredibly smart, because with the best will in the world it is impossible to bring much of the Virgin ‘sparkle’ to short-haul flights on tiny aircraft.

There is one reference in the document to:

“Connect Airways intends to continue as an independent operating carrier with a separate UK AOC under the Virgin Atlantic brand

However, elsewhere it says:

“All flying operations except Stobart Air will operate under a Virgin brand to the extent possible.  This will be timed to coincide with a refurbishment programme for Flybe Limited’s fleet to provide a seamless customer experience in keeping with Virgin Atlantic’s heritage. There will be no change to the brands under which Stobart Air flies today which will continue to be maintained and operated separately.”

There is one reference to the fact that the Virgin Atlantic brand will be used.  However, there is another reference to “a Virgin brand” being used – which logically may not necessarily be Virgin Atlantic.  Perhaps Virgin Little Red (see the mock-up branding above from a few years ago) will return!  Let’s see.

Comments (68)

  • Mr Dee says:

    Little Red may not have worked but hopefully they can learn from that, Flybe didn’t work either so regardless of the name a new strategy needs to be put in place to make them profitable

  • ankomonkey says:

    VS-related: Someone on FT has posted that VS will start flying to TLV/Tel Aviv from September.

  • Yuff says:

    OT : Iberia swapped planes yesterday on IB3166 from an A340 to A350 Madrid Heathrow.
    Screen was very good in business but didn’t like my seat 8J too close to the seat the other side of the aisle, the row 7 widow seat would have been a lot more private…..

  • MIM says:

    Slightly O/T but I’ve seen speculation that Virgin might be candidates to take on some or all of Thomas Cook – any thoughts?

    • Rob says:

      A lot of it is Condor in Germany which they won’t want.

      45% of passengers on Thomas Cook are going on a Thomas Cook package holiday and 25% are on other package holidays. Only 30% of seats are sold direct. This doesn’t make it hugely attractive.

      Virgin wants them out of the way at Manchester but I doubt it wants to buy them.

      • Peter K says:

        It’d be a shame if Thomas Cook airlines go, they are one of the few that properly cater for a gluten free diet.

  • Tom says:

    Avios are “sweeping” from avios.com to BAEC on a semi-regular basis. It seems to work.

    Your 2-4-1 coupon from Lloyds will not migrate so using it got trickier

    • John says:

      There is no such thing as a 241 from Lloyds

      • Mr Dee says:

        I thought there used to be for their premium card, not sure though

      • Brian W says:

        Utter rubbish John, I have two Lloyds 241 vouchers in my account just now.

        You need to brush up on the old versions of the Lloyds cards.

    • Nick_C says:

      Join Aer Club. Keep a handful of points in Avios.com. Avios.com retains full functionality. I can see my upgrade vouchers, and recently booked a flight using one of them.

  • Mark says:

    How flexible is Virgin Atlantic’s licence to use the Virgin brand? Would they have to always use the Atlantic part of their name (as their previous UK domestic operation’s logo shows “Virgin Atlantic Little Red”, not “Virgin Little Red”)?

    If “Little Red” used A320s should the flybe fleet not be called “Tiny Red”?

  • the_real_a says:

    Do they get to ditch any liabilities as part of the deal? I was under the impression that they deeply regretted the price they paid on the Embraer leases.

    • Rob says:

      One has gone and anther has been renegotiated, looking at the docs. That is most of the problem dealt with.

  • Alex Sm says:

    Rob, I told you the other day that they had agreed everything and were just about to announce it but you doubted it…