Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Hadn’t realised that COW was seriously in favour of the Sukhoi as a Q400 replacement. Apart from an attractive sticker price this aircraft is too niche, unreliable, fast depreciating and a long term operators nightmare. A big order for these aircraft could kill a company quickly. If she was in favour this shows serious misjudgement. If her position on the Sukhoi is true then I reiterate I hope it’s Evercore and Laffin running the sale process, and she is not anywhere near it
Interesting posts stationhouse, thank you. Staff have their own agendas which may not coincide with shareholders.
However I do agree with the likelihood of bidders being headed up by Virgin, Stobart in there somewhere and easyJet in the unlikely column. No one has mentioned Lufthansa, the same big picture attractions as apply to Virgin/AF/KLM/Delta apply to LH.
A case could be made for easyJet if they wanted to start LHR operations and build their presence as they have done so successfully at LGW, but that would be radical.
Still think Flybe will try to go alone for a few years yet.
Met COW a few times in her AF and CityJet days, not hugely impressed and hope it’s the Chairman and Evercore running this process.
Jobsagoodun, thanks for your courteous reply. The issue is that once the slots are grandfathered, after three full years operation they can then be used to fly anywhere in Europe not just the designated remedy destinations. That’s when they have value for AF/LH/KLM who can use these slots to feed their hubs as they do already with unrestricted slots, and either sell those unrestricted slots or use them for long haul.
As to why the potential value of these LHR slots has not been factored in to Flybe SP valuation, I guess there are several reasons. It’s a unique situation due the remedy slots rather than unrestricted ones, it’s still a while until they have grandfathered and there must be risk attached to Flybe grandfathering then due the length of time, normal operator risk and the added risk of Flybe not being around to fulfill the period of operation. Then there is the issue of how you value them anyway as an effective sale would require the purchaser to have existing unrestricted slots being used on short haul operation. This narrows the field away from the Middke Wastern carriers but there is still a decent pool of airlines who could use them effectively, being any of the members of the three main alliances.
All the above points to Flybe not selling in the short term as the value in those slots must rise as grandfathering gets closer. Unless someone makes a very attractive offer, or Flybe cannot cowboy remain as an independent until grandfathering occurs
Let’s see what happens.
Not my interpretation jobsagoodun, but there you go.
In any event if the company is bought the slot holdings come with it, so the value in use that you mention will need to be paid for, reflecting the market value of these restricted LHR slots and what their ownership enables the purchaser to do with them. Even if you were right, which I don’t think you are, this would only constrain a stand alone sale of the slits. But, again, I think you are wrong
Hi Pianista. I agree from a bidders perspective that would be the sensible thing to do. However I would hope that the Board and Evercore would be maximising their negotiating position vis a vis the ( one or more) bidder (s). Given the alleged "cash crisis" freeing up resources by selling non core assets such as MRO ( with a long term contract for Flybe's future maintenance) would give more flexibility and a real strength in the negotiations by demonstrating the viability of going it alone in the a sense of a good bid value.
I would have thought delay to post 17.1.19. makes sense from Flybe point of view
From March Flybe will be operating 12 pairs of slots at LHR. They become grandfathered into Flybe’s ownership from Oct 2019/March2020 ( 7 pairs) and Oct 2020/ March 2021 (5 pairs). Once grandfathered they can be traded, but only for use in European operations, which could free up other unrestricted slots already used, by for example AF/KLM/Lufthansa, on existing short haul operations to their hubs. The sale value of the Flybe slots will be less than the seeming £20-30m per pair that is the market value for unrestricted slots, but it should be substantial, as this is a package of well matched slots and there are 12 of them which gives huge scope for optimisation with an existing slot portfolio
Surprisingly confidential so far, no leaks that I can see.
I would not expect any announcement pre 17.1.19. when the Standard listing takes effect and the Board can announce some asset sales which will knock the cash “crisis” issue on the head. That will then give the “go it alone” alternative strategy some legs and allow a serious negotiating position against the bidder (s). At least that’s what I would do....
Agreed, utter tosh with an agenda attached
Issue with drones at airports is twofold. First the plonkers who take a break from playing nerdy games on their PC to get a bit of fresh air and play nerdy games with a drone, near an airport FFS! The possible ingestion of one of these things into a turbofan engine would at best be expensive and at worst catostophic. The second is the terror threat when the nerd takes a break from watching horror videos long enough to read “how to make a drone bomb” and then goes and plays with it near an airport. That is the police nightmare, hence trying to find the idiot at LGW. Really scary prospect.
In danger of overthinking this....but with NDA’s having been signed with other parties, if there are any, then Flybe will be bound by confidentiality. Interesting that Virgin are looking to conduct this in negotiation in public. Could be seen as a sign of their weakness.....
Another view anyway!
Excellent point Pianista...very much Virgin modus operandi.
Who knows though?
Interesting angle LetsTry. I was always of the "say nothing unless you have to" view when I was dealing. But I would have thought reassuring shareholders/ensuring market has all information/ keeping the share price higher would be overriding view just now. IF they have anything they can say......
Hello Tiger. Thanks for your view. I posted below before I saw yours. I think we agree?! No response from Flybe says it all I think....
As with you, been there, done that.....
There will have been contact with BA, Stobart etc by Evercore. Those other parties will know that they will be included again if Virgin make a bid, just to make sure they wouldn't better it. But the fact there has been no RNS saying still in discussions with others is pretty damning to my mind. Flybe will want share price as high as possible to give some framework for bid ( OK, LHR slots, strategic value, synergies have not been priced in by market)
I'm just calling it like I see it. If I was in Evercores shoes I would be fighting for my performance related fee really hard. As they don't publicly seem to be doing so then draw your own conclusions.
As I have said before this is not the end of the world, but I would defer the order for the Porsche until this time next year.....
moniman on reflection my view is that Virgun are the only game in town. The BOD are inept enough not to have spotted Virgin's announcement was coming, hence no joint or immediately subsequent RNS by Flybe. But Evercore are top notch advisors and if there was any other interest then an RNS from Flybe saying, " note Virgin interest, sale is one of strategic options, still in discussions with several,parties, reviewing other options etc" would have been issued PDQ. To my mind the absence of that is very telling and its either Virgin or plough on alone. Not the end of the world but no immediate deal.
I find this very odd. Virgin, or Rothschild, issue this but Flybe have no comment. Looks like Flybe didn't know it was coming. Could it be an attempt by Rothschild to flush out if there is any other interest in Flybe? Or is it a message to some other party?
I can only think it is positive but not sure what it means
No deal NOT a disaster, Fat Finger strikes again!
Can’t make my mind up whether they will wait until after the Standard listing becomes effective on Jan 17th to announce any disposal etc. Must have been working on something, but don’t know etiquette when you are about to sell something which would have needed a Class 1 process but won’t need one post 17.1.19.
Anyway, every day that passes neans cash crunch point is closer and once through first week in Jab it should be cash positive from forward bookings. And the LHR slots get closer and closer to grandfathering to Flybe.
No deal. It a disaster for us shareholders
Line maintenance at MAN and LGW?
So this puts to bed any issues re Flybe and Monarch parting company being down to Flybe.....clearly Monarch Engineering is struggling big time. CVA followed by a sale process sounds pretty distressed to me.