Flybe boss protests airline “will be there in 40 years”

Thursday 21 February 2019

Flybe’s boss has said she expects the airline will still be running in 40 years’ time amid shareholder outrage at a proposed Virgin-led takeover, which was this week threatened by a rival US bid.

The comments from CEO Christine Ourmières-Widener came during an interview with the Independent this month during which she protested, “Flybe is here to stay.”

They followed criticism over the suggested sale to a consortium called Connect Airways involving Virgin, the Stobart Group and hedge fund Cyrus Capital for £2.2million, which has enraged shareholders as it is expected to leave share prices valued at just 1p.

Multiple attempts have been made to block the deal, with the airline’s leading shareholder calling for a replacement of Flybe’s chairman and an alternative solution.

Pictured: The Virgin-led consortium, Connect Airways, is still the main deal on the table to rescue Flybe.

Andrew Tinkler – former CEO of Stobart group – also put in a now-rejected bid for a capital injection into the troubled airline, which started life as Jersey European but is now headquartered in Exeter.

The latest in the series of alternative offers came yesterday from Mesa Air Group, a Phoenix, Arizona-based airline, which it was believed would strengthen Flybe's financial position significantly, and bail it out of being on the very cusp of collapse.

It was proposing injecting £65million into the UK regional carrier as part of a new consortium with a US hedge fund - Avenue Capital - and an investment firm, Bateleur Capital.  

However, the whole deal was conditional on the previously agreed one with Virgin being totally abandoned. 

Flybe has now knocked back the proposed deal, which was reportedly backed by Mr Tinkler. In a statement it said that it “does not believe that the indicative proposal is executable in the timeframe required to enable Flybe to continue to trade.”

As far as the differences between the deals go, under the new terms, Flybe would have got the £65million worth of equity at about 4.5p a share, which is significantly more than the total value of the previous terms. Alongside the equity would also have been the potential of assets, which could see Flybe with a total of a £120million boost. Finally, Flybe would have been able to remain on the London Stock Market as part of these new terms.  

In contrast to that, the original deal would see the airline recapitalised.

At present, no more offers have been forthcoming with just days to go before the Connect Airways deal deadline. Whatever decision is made, it does not need shareholder approval, so will be down to the company's board.  

If the deal falls through for any reason, there are fears that those who previously worked for the airline could face losing their pensions. 

The airline’s retirement fund is not protected by the Pension Protection Fund (PPF) if Flybe becomes insolvent. 

Despite turbulent times for the airline, it is nonetheless continuing business, this morning announcing a link to Heathrow from Guernsey.