Recently I wrote about Flybe's grim financial position, which included dramatic profit warning forecasts (i.e. notifying the market that their losses would be even worse than expected) and a huge share price drop. So it didn't come as a huge surprise that just a few weeks later, Flybe admitted they were open to the idea…
Continue reading: British Airways And Virgin Atlantic Both In Talks To Acquire Flybe
Share your questions, experiences, and thoughts below.
What a photo-op of Sir Branson, but his employee obviously felt shocked and probably offended.
This is the third article in a row that James has posted that I have already read elsewhere. Perhaps try getting up earlier mate.
I am struggling to make sense of how this would work for Virgin at all given they are not profitable themselves, and they have so little overlap as you point out with flybe hubs.
I could see this working for BA as a nice little feeder network, and although the idea of extending their quasi-monopoly even further isn’t appealing it at least makes sense.
I’d also be interested to know how an acquisition of a regional airline like Flybe might affect the chances competition authorities allowing IAG to acquire Norwegian as well, something they apparently still want to do.
The reasoning behind Virgin interest is that they would need feeder eventually (bare in mind that Virgin is consolidating it's network on dual hub strategy - Manchester and Heatrow).
On top of this, Flybe is 4th biggest owner of Schiphol slots (which are becoming incredible scarse and problematic for KL). AF-KL will have have a big stake in Virgin soon, KLM is also the biggest European operator of Embraer fleet (with E&M center at AMS) and KLM still has British operations (some of their personnel is stationed at UK bases plus KLM Cityhopper still holds a valid UK AOC.
Add into equation the rumour that KLM will transfer some LHR slots to Virgin, and to me Virgin (backed by Delta and soon a part BlueSky JV) is a frontrunner here.
@james you do realise the history of the majority of BE routes don't you? Maybe you don't given you were Down Under.
I'd be surprised if we saw BA going in for BE. Here's the reason. BA decided 10-15 years ago that regional flying was not for them. Hubs at places like MAN, BRS, SOU and BHX were shut. Guess who the operation was sold to.....FlyBe.
The only operation that was kept was LCY.
In relation to comments about reed into London. BE shut all their LGW operations a couple of years back. They sold to EZY. The LHR services were picked up after VS shut down Little Red. The only service therefore that BE operate into London that BA don't already operate is the NQY service which BE recieve a government subsidy to operate. In short there really isn't any new feed routes into London that acquiring BE would give them and Then there is the UK competition authorities to contend with.
I'd be shocked if BA decided to acquire for BA. They have made it clear that regional flying isn't for them. If IAG did put in a bid I'd have thought that Vueling might be the carrier to take these routes but then again Vueling has a dire reputation and absorbing a new fleet would alter their business model.
As for VS, I agree on the face of it it appears odd. But VS Have given MAN a bit of love so there is potentially a bit of feed on services into MAN. It's basically going dual hub. To me though the interest fromVS is part of the wider VS/DL/KL/AF arrwngement. Maybe just maybe KL have decided they'd like a return to th UK regional market. And rather than acquire BE themselves for Cityflyer (like they did with Air UK) it is more appealing to have VS make the approach especially given BEs position in the AMS market. Following approval of the share purchase of VS, the former BE could be closer aligned with KLM Cityflyer. Just a thought.
Struggle to see that BA would be allowed to use the Heathrow slots that Flybe are using for their domestic routes, as these are (all, I think) “remedy” slots BA were required to offer to competition following their purchase of BMI.
With no use of the heathrow slots, and no plans for non-london flights, what would BA gain, network-wise beyond a few extra connections for the AA joint venture services from Manchester? Roll back about 10/15 years, and it was Flybe that purchased BA’s domestic regional (BA Connect) operations!
Maybe they can see some value proposition from having Flybe as a 6th carrier in their stable, but I struggle with this given the lack of overlap (fleet type, value proposition etc).
Virgin, maybe a bit different. I can see the benefit of a sister brand that provides feeder services to Virgin and it’s equity partners, for instance codeshares with Delta through Heathrow, Edinburgh and Glasgow and closer relationships feeding the AF and KL hubs in addition to Virgin at Heathrow and Manchester? Again far from a perfect match, but maybe some possibilities?
I could hope that whichever airlines becomes the acquirer will develop luggage policies compatible with other carriers. I did a round trip between Dublin and Inverness where weight and baggage limits were so out of line with other carriers that I had to repack luggage and leave luggage at Dublin hotel to meet luggage limit. I had flown over in premium economy from North America with 23 kilo limit. I think Flybe limit was one bag at 15 kilo limit. The inconvenience convinced me not to fly them again and take less direct route.
What a weird analysis. So it makes sense for BA because they can change the Flybe routes to provide them more feed, but it doesn't make sense for Virgin Atlantic to do the same (even though they have a MUCH higher connection possiblity than BA does, with them both having a Manchester base)? Why?
Flybe dosent have the LHR slots that BA really want. BA aren’t interested in flying regional routes that don’t feed into its London hubs.
Problem is also capacity.
T5 is already full and the domestic gates already crowded so any new T5 domestic routes would likely be bussed which isn’t popular with passengers.
T3 isn’t capable of separating international domestic arrivals so they would have to use T2. Does BA really want to spread itself over 3 terminals??
I suppose they could get a dispensation (like VS did for Little Red) to run an airside bus service to T3 and 5 and so avoid pax having to reclear security but that just adds to costs and complexity (and does HAL want more airside bus traffic to deal with even if they were pollution free electric ones)
And given the number of other airlines IAG have expressed an interest in buying yet never followed through their bids they lack credibility and could be sen as desperate. One minute they were buying Norwegian the next not ...
Curious as to why IAG would want Flybe although it could be to help connections within the British Isles as Aer Lingus and BA do contract some franchise agreements for regional traffic which is Flybe's bread and butter. Aside from that it seems more likely they just don't want Virgin to get it.
Virgin on the other hand would really benefit from Flybe's network not only as a feeder airline but as an expansion of the business. Delta like all the Big 3 of America has a lot of experience with franchising and operating regional airlines combined with KLM's cityhopper and Virgin purchasing Flybe is a logical step for the airline.