Virgin and Flybe in the tree, K-I-S-S-I-N-G...

Think this is VS doing what VS do, generating media coverage. How many times did they 'try' and buy bmi?

https://news.sky.com/story/virgin-atlan ... e-11560548

Well Virgin have most to loose of they go under, so makes sense to either buy or generate other interest.

What VS needs is lots of feeder traffic to Heathrow and Gatwick from the regions but the Flybe network doesn’t offer that.

The one route to LGW is Newquay. A lovely place with lovely people I’m sure but it’s not going to drive a lot of passengers to VS.

With Heathrow it’s Edinburgh and Aberdeen which are two of the three routes Little Red flew. Remember them?

If Flybe had more LHR and LGW slots it would be good for VS but they don’t,

Anyway it will be the guys in Atlanta deciding.

Hopefully we can get Tier Points for Flybe flights now. Better timing on transatlantic routes and connections between LHR to EDI would be greatly appreciated as well.

Can't wait for BHX-MCO on a Dash 8

Newquay is moving to LHR

What VS needs is lots of feeder traffic to Heathrow and Gatwick from the regions but the Flybe network doesn’t offer that.

The one route to LGW is Newquay. A lovely place with lovely people I’m sure but it’s not going to drive a lot of passengers to VS.

With Heathrow it’s Edinburgh and Aberdeen which are two of the three routes Little Red flew. Remember them?

If Flybe had more LHR and LGW slots it would be good for VS but they don’t,

Anyway it will be the guys in Atlanta deciding.

But Flybe do feed Virgin a lot at Manchester.

Newquay route is moving to LHR! But I can't see it being too successful if needs government backing?

I think they also codeshare with Air France on flights into CDG which may be a further consideration in the wider relationship.

Isn’t it all about gaining slots at LHR (ironically the slots VS lost when they closed down Little Red)?

At some point the restrictions currently in place on Flybe’s ABZ & EDI slots are relaxed, at which point they become very valuable indeed.

[mitchja]

I believe those ex-Little Red / ex-BMI LHR slots can only be used for UK domestic services anyway can't they, so are no use for International flights with any airline?

I would guess VS's operations at MAN would have the biggest gains *if* this where to all go though.

I believe those ex-Little Red / ex-BMI LHR slots can only be used for UK domestic services anyway can't they, so are no use for International flights with any airline?

Flybe has to use them for 6 IATA seasons, so 3 years, after which they become grandfathered and can be used for any EU route (plus - bizarrely - Riyadh, Cairo or Moscow).

We’re now into season 4 I think so Flybe’s new owner would have to keep up the EDI & ABZ routes until March 2020. Thereafter, assuming the VS/KL/AF deal has gone through, the slots could be used by KL or AF. Who I guess could swap some of their existing slots with VS/DL.

Don’t know, just speculating, but there has to be an ulterior motive for VS buying a not very successful UK regional airline offering very limited feeder traffic.

NQY LGW is ending next year and being replaced with NQY LHR. Not sure where they are getting 4 slot pairs for that!

Flybe has to use them for 6 IATA seasons, so 3 years, after which they become grandfathered and can be used for any EU route (plus - bizarrely - Riyadh, Cairo or Moscow).
.

IIRC those were previous BMI routes that someone somewhere wanted to protect so the slots weren’t turned into TATL slots.

NQY LGW is ending next year and being replaced with NQY LHR. Not sure where they are getting 4 slot pairs for that!

BMI remedy slots from BA.
They are likely to be glued on to the government backing, so could become a requirement for those slots to be used to NQY only - so if Flybe collapsed and the slots went back to BA, they could be forced to send 4 Airbus a day to NQY with only £300 a flight form the government...

If VS buy Flybe, I think it's about protecting the current codeshare deals, which do generate some traffic via third party bookings, eg Expedia. (ie. customers who enter MAN-USA type searches now get a Flybe-VS/DL option). I don't think it is about Heathrow slots, or feeder traffic.. neither is significant enough. But the codeshare bookings probably equal/surpass the current Flybe valuation.
So my prediction is a bailout buyout, preserving Flybe branding and infrastructure, but with the appropriate clauses to prevent another buyer buying Flybe and ceasing the VS codeshares.

Looks like this could get expensive if bidding war starts

http://www.cityam.com/269658/arch-rival ... struggling

But Flybe do feed Virgin a lot at Manchester.

Newquay route is moving to LHR! But I can't see it being too successful if needs government backing?

Newquay-London is a PSO route, so basically Flybe are "obliged" to operate the route, but in in return the government provides a subsidy for operating that route. If Flybe decide to withdraw the route, somebody else can step in and apply for a PSO designation. There are various routes across Europe that are PSO routes as they are socially important for the communities they serve and may not necessarily be a cash cow and might not even be there without the subsidies available for PSO routes.

Whoever buys Flybe will have their work cut out turning round an operation that has been a basket case for a long time but are vital for some of the places they serve given they operate routes nobody else will touch.

Looks like this could get expensive if bidding war starts

http://www.cityam.com/269658/arch-rival ... struggling

And that is probably one reason why Virgin are interested, to avoid its main rival buying up an airline that it has interline deals with. If IAG did buy Flybe, it would effectively be buying back the old BA Connect operation that BA sold to Flybe 10 years ago. It wouldn't be the first time though as they effectively took back the routes operated by former franchise carrier BMed as part of the bmi deal.

Delta I mean Virgin are probably running the numbers on it as we speak. My biggest thought is the Q400/Dash 8 is the cause of a lot of Flybe's problems. I still find it hilarious that they operate into Heathrow with a Q400. If the take over happens I can see Delta/Virgin moving Flybe to and all jet operation. With a fleet of either A319's or A220's possible config 8 business class seats the rest economy.

I think thats what was missing the first time round with Little Red no differentiation when flying domestic. It's worth nothing that Delta has 75 A220's on order with another 50 options so those could come into play if the takeover was successful. Flybe lost a lot of it's value when it sold the LGW slots to focus on Manchester and Birmingham.

Virgin cannot make the same mistake they did with BMI they need some kind of domestic feed for Heathrow and Manchester. Delta knows how to run a domestic operation and in recent years has been the best performer financially in the US. BA and Eddie Stobart group are in the mix so the final price will obviously be inflated.

If they buy it they'd probably move all Heathrow slots over to Virgin to help with expansion or more frequencies, for example putting LAX back up to 3 daily. (BTW, does anyone know where the slots are coming from for the new Las Vegas service and the second daily Johannesburg frequency)

I would also second them having an all jet fleet of probably A220's as they can get them cheap and operate out of LCY. Id say one reason for Flybe's failure is their Dash 8s as i know that a lot of people don't really want to fly on "propeller" planes and there is a lot of "scary" videos of Flybe Dash 8s landing in windy conditions.

They could probably create a really niche market if they move all London operations to LCY and market it well and then they can expand from there. They would also probably get some cheap slots at LCY seen as they're wanting to attract more airlines/routes.

The problem is Virgin/Delta lack any connective in Europe which is a problem for them when say people are going for the US to Greece and they end up going on BA.

The suggestion that Virgin could use the bmi remedy slots for long-haul routes is an enduring myth.

The rules on the use of remedy slots are very clear in that they can only be used for the specified routes or, after a period of time, other short-haul services.

Economist had a few decent articles about this, mainly Flybe should absolutely not be allowed to be sold to IAG. But Flybe have just sold their HQ on a sale and leaseback for operational funds. They're situation sounds dire.

Mind you, what can you expect from an airline who started head to head competition with their former partner, Loganair, on niche routes, in winter?

The suggestion that Virgin could use the bmi remedy slots for long-haul routes is an enduring myth.

The rules on the use of remedy slots are very clear in that they can only be used for the specified routes or, after a period of time, other short-haul services.

I think after three years the slots revert to the airline who has used them fully. Little Red must have been a disaster for VS to quit so soon.

Seems like VS and BE enjoyed their K-I-S-S-I-N-G so much they invited a third bedfellow - the Stobart Group.

Presume this is likely to support and acellerate the development of VS at MAN.

Very interesting
https://www.ft.com/content/722dff98-151 ... f78404524e

Deal done.

So, will Flybe be rebranded and become part of the Virgin family? Or will it be a stand-alone operation that remains part of Avios?

Rob at HfP has been weighing up the options:

https://www.headforpoints.com/2019/01/1 ... ybe-today/