Flybe for sale amid turbulent times
● Airline in talks with a number of ‘strategic operators’ over possible sale
Under-pressure regional airline Flybe is in talks about a possible sale of the group weeks after warning over profits.
The carrier, which runs a number of services out of Scotland, said it is also looking at cutting further costs and flight capacity as it battles challenging conditions in the airline industry.
Unions expressed concern at the news yesterday.
Garry Graham, deputy general secretary of the Prospect union, which represents several hundred staff at the airline, said: “This is more uncertainty for the staff we represent at Flybe.
“We are offering our full support to those affected and hope that whatever happens Flybe can continue as a going concern with jobs protected.”
Brian Strutton, general secretary of the British Airline Pilots’ Association (Balpa), said: “Balpa believes that Flybe is fundamentally a sound airline and we will scrutinise any offers to buy Flybe very carefully to ensure continued employment is protected.
0 CEO Christine Ourmieres-widener – ‘improvements in the third quarter’
BRIAN STRUTTON, BALPA
“We also expect to be consulted by Flybe and potential bidders over any future plans they have for the airline and its employees, and we reserve our right to express our opinion and take any other steps in order to protect our members’ interests.”
The airline is in talks with a number of “strategic operators” about a potential sale and has hired Evercore as adviser to help with the review and sale process.
It comes weeks after Flybe warned over profits following
falling demand and a £29 million hit from rising fuel costs and the weak pound.
The alert sent shares tumbling by more than a third on the day and nearly 75 per cent has been wiped off its stock market value since December.
Stobart Group walked away from a bid for Flybe in March after the two firms failed to agree terms.
But Stobart, which already has a franchise agreement with Flybe, could reportedly come back into the frame.
Flybe, which used to have a franchise deal with Loganair, has 78 planes operating from airports including the likes of Edinburgh, London City and Southampton, and flies to destinations across the UK and Europe. It carries around eight million passengers a year.
In half-year results also announced yesterday, Flybe saw cost-cutting help lift underlying pre-tax profits to £9.9m from £9.2m a year earlier.
Statutory pre-tax profits for the six months to 30 September 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. Passenger numbers edged 0.6 per cent higher to 5.2 million.
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.
“We are responding to this by reviewing every aspect of our business, especially further capacity reduction, cash management and cost savings.”
“Balpa believes that Flybe is fundamentally a sound airline and we will scrutinise any offers to buy Flybe very carefully”