Shares at Flybe take off following Virgin takeover bid speculation
SHARES IN Flybe took off following reports that Virgin Atlantic is in talks about a takeover bid for the struggling airline.
Virgin, part owned by Sir Richard Branson, is thought to be vying with Stobart to buy Flybe and is interested in its take-off and landing slots at London’s Heathrow Airport.
The regional airline, which flies from Leeds Bradford and Doncaster Sheffield airports, put itself up for sale last week after warning over profits this year.
The carrier is battling challenging conditions in the airline industry and has been hit with falling demand and a £29m hit from rising fuel costs and the weak pound.
Flybe has 78 planes operating from smaller airports, and flies to destinations across the UK and Europe, including Amsterdam.
It carries around eight million passengers a year and Virgin would look to attract customers into its long-haul network via Flybe’s domestic routes..
Trade unions have already raised concerns over the impact of Flybe’s sale on the carrier’s 2,300 employees.
In half-year results announced last week, Flybe saw cost-cutting help lift underlying pre-tax profits to £9.9m from £9.2m a year earlier.
But statutory pre-tax profits for the six months to September 30 more than halved to £7.4m from £16.1m a year earlier.
It saw group revenues fall 10 per cent or 2.4 per cent on an underlying basis to £409.2m after it cut capacity by 9 per cent.
Chief executive Christine Ourmieres-Widener said the group continued to see improvements in the third quarter and added that cost savings had already helped to drive progress in boosting profits.
But she added: “There has been a recent softening in growth in the short-haul market, as well as continued headwinds from higher fuel and currency costs.”