Virgin Atlantic in talks to buy Flybe

Daniel Fowler
November 25, 2018

According to reports from Sky News, Virgin Atlantic, which is part-owned by Richard Branson, has opened talks with Flybe advisors, about making an offer for the company.

Virgin Atlantic closed its British domestic airline network Little Red in 2015 after it was "not able to make a positive contribution" to the group and following a review of its network that had put emphasis on its transatlantic routes.

Rothschild, the investment bank, is advising Virgin Atlantic on its interest in Flybe.

Tough competition in the industry has also led to a price way between airlines.

Confirming the talks, Flybe added that there was no certainty that an offer would be made by Virgin.

Monarch Airlines crashed into insolvency in 2017, while more recently, Primera Air, a budget carrier which began offering long-haul flights from British airports this year, filed for administration.

A Virgin Atlantic plane
Virgin Atlantic is reportedly in talks over a takeover bid

The transaction remains subject to regulatory approvals, which could be affected by a no-deal departure by the United Kingdom from the European Union. The hard market conditions led to the collapse of Air Berlin and Monarch Airlines a year ago.

Stobart, which is the focus of a bitter courtroom battle between board members and its former chief executive, abandoned a previous bid ‎earlier this year. As well as a sale, options include further reducing capacity and undertaking cost saving measures.

Flybe has 78 planes operating from smaller airports including Birmingham, London City, Southampton and Norwich, and flies to destinations across the United Kingdom and Europe.

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.

Flybe and Virgin Atlantic have yet to comment.

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