Virgin Atlantic in talks with Flybe
Shares in Flybe took off yesterday 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.
Flybe shares were up nearly 20% in morning trade at 11.4p.
The regional airline put itself up for sale last week after a profits warning earlier in the year. The Exeter-based car- rier is battling challenging conditions in the airline industry and has been hit with falling demand and a £29 million hit from rising fuel costs and the weak pound.
Flybe has 78 planes operating from smaller airports including, and this week was announced as the operator for a new service from Newquay to Heathrow. It carries around eight million passengers a year and Virgin would look to attract customers into its longhaul network via Flybe’s domestic routes, according to Sky News.
Trade unions have already raised concerns over the impact of a 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 £9.9 million from £9.2 million a year earlier. But statutory pre-tax profits for the six months to September 30 more than halved to £7.4 million from £16.1 million a year earlier.
It saw group revenues fall 10% or 2.4% on an underlying basis to £409.2 million after it cut capacity by 9%.