Virgin Atlantic Sale

Virgin’s plans for Flybe revealed in the official scheme document – and which brand will be used?

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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.

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Comments

  1. do Stobart Air actually operate under their own brand, or just wet leases for other (competing?) airlines?

    • Aer Lingus from GLA-DUB are Stobart Air

    • What about Stobart flights operated under the Flybe brand, I guess they will be rebranded?

      • The article says not.

        • It says not but that makes little sense.

        • flyforfun says:

          It does make sense depending on the length of the deal to fly that route. If the plane isn’t utilised 100% by Flybe, then why would it be rebranded? It wouldn’t surprise me if Stobart arrive in one airport as one airline and leave as another.

          Also rebranding would make it difficult if Stobart want to sub in other planes on different routes for maintenance or other reasons.

  2. Sounds pretty reasonable actually. I’d be happy to see Little Red return, esp for domestic connections onto VS long haul at LHR!

  3. Is there any info about the existing franchise deal that Blue Islands has with flybe? Will this change to a Virgin brand too?

  4. Memesweeper says:

    It’ll be “Virgin Connect”. You heard it here first 🙂

    • Shoestring says:

      would be a shame not to use ready-made Little Red – and (mother) Virgin Atlantic could presumably get a payment for the (sunk) development costs

      Little Red would also have some immediate brand recognition

    • Would not surprise me.

  5. I have a reward flight with stobart air in July… What does the takeover mean for this flight? Will it be cancelled??

    • Shoestring says:

      depends on the flight, of course – most Stobart flights will continue, some won’t – so you’d need to check the specifics

  6. Not sure where that Little Red image came from but the Little Red (wet leased Aer Lingus) aircraft had Virgin Atlantic as their branding on the aircraft.

  7. Deenesh Revis says:

    Rebrand their small Embraer fleet to Virgin and have them fly into LHR rather than their Dash-8’s and create a more streamlined ‘jet to jet’ connecting option?

    • It’s quite fun having the Dash’s at Heathrow.

      But yes, it would be a better experience connecting to/from EDI with one of the Embraer fleet.

      It does feel like BA have started to up their game again on the domestics in anticipation of the competition with the Virgin brand. Boarding/Disembarking from front and rear at Edinburgh is happening on almost every flight speeding up turnaround considerably. On the last 3 flights it’s been fully boarded and the doors have been shut 10-15 minutes ahead and we’ve been on the runway or airborne at the timetabled departure time.

      Just need to find a way how to speed things up at Heathrow.

  8. NickAnon says:

    OT –
    All the Marriott Moments finished/sold yesterday, and now there is this message-
    “Just a Moment
    Were making some system updates to create a fabulous new site, full of more exciting Moments than ever before. Check back soon to bid, redeem and explore them all. In the meantime, check out Marriott Moments.”
    And what appears to be a dead link.
    Any idea whats going on?

    • New Card says:

      Most likely linked to the “Bonvoy” launch on 13/02.

      • Shoestring says:

        Yep – 12/02 is the last chance to get SPG Amex (USA).

        UK to follow shortly, no date announced.

        You have been warned if you want a last SPG card! 🙂

        • Absolutely not the case.

          Might happen, but nothing firm AFAIK.

          Anyone invited to the Bonvoy party at Sotheby’s by the way? Looked like a general invite, not a press event.

          No-one has a press event at 11am on a Sunday …..

  9. Mr(s) Entitled says:

    I would be very surprised if the document were to conclude that Flybe was operational, had a potential future, and could have possibly achieved a better exit for shareholders through Administration.

    Virgin from Man only fly direct to MCO, JFK, LAX, LAS, BOS, BGI, ATL. and a code share on Jetairways to BOM. No Delta flights.

    In fairness, they are Virgin ATLANTIC but hopefully this might lead to an increased MAN presence.

  10. No mention of a Loyalty scheme? I only use Flybe as my company sanction it. We loathe Virgin but I guess we’ll see what happens. Trains are usually more reliable on Flybe domestic network anyway. Hope the Flybe staff jobs are safe.

    • Shoestring says:

      ‘Flybe can confirm that, with effect from 30 April 2019, we will no longer be an Avios partner and that after this date customers will no longer be able to collect or spend Avios with us.
      Until the closure of the programme on 30 April, customers can still spend Avios and redeem them for Flybe flights operating through October, as well as on the wide range of reward flights, hotels, car hire and other travel experiences on avios.com.‘For further information on what happens to Avios after 30 April 2019 customers are advised to contact Avios directly. Meanwhile, we are working on a new loyalty programme offering, the details of which will be shared when finalised.’

      • As somebody based in the South West, I feel that the air routes from NQY will prosper due to how bad the new Hitachi trains are from Paddington to Penzance. So uncomfortable! Thids would encourage me to fly the route rather than get trains, even if they are often more reliable.

        Maybe such a route will prosper for Virgin consortiums new takeover. I will watch with interest.

    • “Trains are usually more reliable on Flybe domestic network anyway.”

      Try taking a train from Inverness to Belfast !

  11. The position of having UK and EU(Irish) AOCs might just be an incredible strength depending on what happens at the end of March (are FR guaranteed to be allowed to fly domestically in the UK on their Irish only AOC if there is no deal?)

    • That’s up to the UK govt, there doesn’t need to be a deal

    • Ryanair has recently acquired an UK AOC, so domestic flights should be ok.

    • There is a provision on this in both UK and EU no-deal planning, a so-called “bare bones agreement”. I recently wrote on this for a work project

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