Hedge fund bosses plot to revive Flybe

Seven months after regional airline collapsed . . .

A GROUP of mega-rich hedge fund managers has launched an audacious bid to resurrect Flybe and bring it back to the skies early next year.

Thyme Opco, which is run by secretive hedge fund manager Lucien Farrell and owned by the Exeterbased airline’s former shareholder Cyrus Capital Partners, is closing in on a deal to buy the failed business out of administration.

Cyrus was one of three firms, including Sir Richard Branson’s Virgin Group, that jointly owned the carrier before it went bust in March.

Flybe’s revival in early 2021 could throw a lifeline to struggling regional airports which were crippled by its collapse and have been hammered by Covid-19. Before Flybe failed, it flew 8m passengers a year between 81 airports in the UK and Europe.

Multi-millionaires Lucien Farrell and Jonathan Peachey – former chief executive of Virgin America – are behind the plans to bring what was Europe’s largest regional airline back to life.

Fund manager Farrell, who controls Thyme Opco, was previously a director of a tax avoidance scheme known as Rushmore, which was shut down in 2009 following an HMRC probe.

Little is known about the Cambridge graduate, who is thought to live in Notting Hill with his wife and their children. The finance whizz, 45, went to Eton with Ben Elliot, co chairman of the Conservative party whose aunt is the Duchess of Cornwall.

Farrell was tapped to run Cyrus’s European arm by his mentor Stephen Freidheim, a flashy American hedge fund tycoon who set up Cyrus in 2005 and established Virgin America with Branson. Freidheim is a well-known philanthropist and member of the New York elite who manages money for his alma mater, Yale University. He reportedly splashed out on a two-storey, £20m penthouse on Manhattan’s Fifth Avenue almost a decade ago.

Farrell and Peachey’s pledge to bring Flybe back was welcomed by pilot union Balpa, which said the news ‘will give everyone a degree of confidence that recovery is coming soon, and that their skills and knowledge are still going to be vital’.

And shares in airlines Easyjet,

British Airways-owner IAG and Ryanair all rose between 4.4pc and 4.8pc following the announcement, which is one of the first votes of confidence in the industry’s recovery.

Cyrus also has not yet divulged a detailed strategy for Flybe.

But a City source said it will be a ‘very different Flybe’ that is likely to be smaller and more focused on the UK.

Cyrus manages around £3bn worth of funds, but came under fire for trying to negotiate a £100m doomed bailout loan for Flybe with the Government.

Cyrus is thought to have already lost millions trying to prop up the company. The firm teamed up with Virgin and Southend-owner Stobart Group to form Connect Airways. The consortium rescued Flybe in early 2019 in a cut-price deal worth £2.2m that virtually wiped out investors’ holdings.

Before its collapse Flybe was a public company valued at £36m, with 2,400 staff and 63 planes.

Cyrus owned 40pc of Flybe under the arrangement and Connect was said to have ploughed £110m into the company by the time it went bust. It is working with the Civil Aviation Authority to plan the relaunch.

A Thyme Opco spokesman said: ‘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.’