Flybe will be back next year, claims venture capital firm

Cyrus Capital has bought ‘the brand, intellectual property, stock and equipment’ from the administrators of the failed regional airline

Simon Calder
Travel Correspondent
Monday 19 October 2020 14:01 BST
Airborne again? Passengers boarding a Flybe aircraft at Manchester airport before the airline collapsed in March 2020
Airborne again? Passengers boarding a Flybe aircraft at Manchester airport before the airline collapsed in March 2020

Seven months after the overnight collapse of Flybe, one of its backers has said it will be flying again “in early 2021”.

The hedge fund Cyrus Capital has bought “the brand, intellectual property, stock and equipment” from the administrators of the failed regional airline.

The company and the administrators, EY, have refused to say how much was paid.

Before Flybe failed on 5 March 2020, it flew 8 million passengers a year between 81 airports across the UK and the rest of Europe.

Cyrus Capital owned 40 per cent of the airline, with Virgin Atlantic and Stobart Group taking 30 per cent each.

The partners took over early in 2019 and pumped in a rumoured £100m to keep the airline afloat over the winter. They planned to rebrand the airline as Virgin Connect and set about cancelling loss-making links.

But the scale of Flybe’s problems were bigger than the consortium feared. The expected summer recovery never happened, and losses increased as the airline went into what was to be its final winter.

More than 2,000 Flybe staff lost their jobs when the airline collapsed, and airports such as Belfast City and Southampton lost the vast majority of their route network.

Flybe failed as the coronavirus pandemic took hold. The almost complete shutdown of UK aviation delayed the process of filling viable routes by other airlines, primarily Loganair and Eastern Airways. Channel Island routes have been taken over by Aurigny and Blue Islands.

But these carriers now face the resurrection of Flybe. EY’s statement said: “While the transaction is still subject to certain confidential conditions, the deal is expected to allow the Flybe business to restart operations as a regional airline in the UK under the Flybe brand in early 2021.

“Following today’s announcement, the administrators will work together with Thyme Opco, the Flybe management team and the UK Civil Aviation Authority to prepare for the relaunch of Flybe’s airline operations.”

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The joint administrator, Simon Edel, said: “Today’s announcement, and the upcoming completion of this sale, will be great news to communities around the country that were previously served by Flybe.

"The restart of this iconic brand, which was once Europe’s largest regional airline, will provide a potentially significant boost to aviation jobs, regional connectivity and local economies.”

A Thyme Opco spokesperson said: “We are extremely excited about the opportunity to relaunch Flybe.

“The airline is not only a well-known UK brand, it was also the largest regional air carrier in the EU, so while we plan to start off smaller than before, we expect to create valuable airline industry jobs, restore essential regional connectivity in the UK, and contribute to the recovery of a vital part of the country’s economy.”

A senior aviation source, who did not wish to be named, said: “I have very serious concerns about the wisdom of restarting Flybe in the current climate.”

The statement appeared to pin the collapse on the coronavirus crisis, saying the administrators were appointed “following the significant disruption to the airline industry caused by the Covid-19 pandemic”.

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