guardian - balance25 Nov 2018 08:08
What does Virgin see in floundering Flybe?
Like the bumblebee, which apparently defies the laws of aerodynamics, Flybe has long tantalised observers, who wonder how this unwieldy entity somehow stays aloft.
True, it has amply demonstrated one dictum of modern commercial aviation: to make a million pounds, best start with two. And then some: an airline that floated with a notional value of £215m at the start of the decade is worth a tenth of that today. But Flybe, Exeter’s great purple conundrum, keeps going, through successive plans unveiled by management, even if the vaunted turnarounds have looked more like slow death spirals.
However, a week after it was put up for sale, a suitor has emerged in the form of Virgin Atlantic. While it might be possible to imagine Sir Richard Branson riding to the rescue of a British asset on the cheap – a kind of airborne Northern Rock – the tycoon no longer has a controlling interest in his airline, and it is not entirely clear why Delta and Air France, as Virgin’s majority stakeholders, would want more sputtering carriers to deal with. Its Heathrow slots will be of interest, while trying to channel more customers from the sticks to Manchester to fill up transatlantic planes could make Flybe an interesting proposition.
However, memories of Virgin’s tried-and-failed Little Red – the domestic air routes granted to Virgin as “remedy slots” after British Airways acquired BMI, to keep a modicum of competition – must loom large in the mind. Yes, Flybe’s turboprops are half the size of the half-full A320s Little Red plied in those brief, inglorious days. But the dampeners of air passenger duty, Brexit uncertainty and onerous aircraft leases won’t be wished away.
Subsidised routes from Heathrow for a regional carrier might be of some assistance, but even at £20m, investors would query whether Flybe is a Black Friday bargain. A Virgin aircraft still looks more likely in outer space than Exeter.
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