Ryan Mee, CEO of Fulcrum Metals, reviews FY23 and progress on the Gold Tailings Hub in Canada. Watch the video here.
Couldn’t find it on Reuter’s site....
Enough of this for the week end, off to Twickers with my son, hopefully a good match
Agree toastal, I have little faith in COW, but hopefully Evercire will step up and they are a class outfit. It’s now into the deal stage and there will be a massive success fee on a big value I would hope. And to be fair ( not sure why I need to say that) to COW she was involved in the successful sale of the then basket case CityJet, but I have never discovered for how much.
Hi brown dog. That’s about right.....the issue is what value to apply to the slots as they are available only after a deferred period so there must be some discount, I understand that £30m is the rate for early morning and evening slits, but not too much of a discount in middle of day for long haul use. It’s certaibly nine figures value to Flybe subject to adequate negotiation.
Many thanks for your kind comments, I try to inject some objective comment amongst the one line posts on here
As I posted earlier there is a potential “shuffle” between restricted to European operation slots that Flybe currently operate, and unrestricted slots that say AF for example operate to say CDG which can be swooped internally after Virgin buy Flybe. There are 7 daily pairs operated currently by Flybe, and they will start owning these if they continue to operate ABZ and EDI to LHR until Oct ‘19 and March ‘20 end of IATA Summer and Winter seasons respectively.
Flybe announced a new four times a day route Newquay LHR starting in March 2019. I thought this was a cost saving measure that would mean stopping the EDI route which competes with BA. Wrong!! It’s another four pairs of daily slots obtained under the IAG/bmi remedy procedures, which again will come under Flybe’s ownership if they operate continuously for three full IATA summer and winter seasons. Apparently within the remedy slot package there were 12 slot pairs and once you are operating some of the remedy routes you can apply for use of any other unused remedy slots. Which is what Flybe have done, so starting October ‘21 and March ‘22 there will be another four pairs of LHR slits available for the “shuffle” I described above.
OK it’s a way off yet, but more underlying value for an acquirer with their own European LHR operation who is able to swop their unrestricted slits with Flybe’s restricted ones once they achieve grandfather rights.
Genius, and even more value for us shareholders provided Evercore can extract value in the negotiations.
Hi greendave66
Flybe are operating seven slots a day to LHR, currently from EDI and ABZ. These routes started March 17 and are using slots that IAG had to make available to foster competition after their purchase of bmi which increased IAGs slot holding at LHR. The EC competition bodies have restricted the use of those skits to specific UK and short haul European routes until they have been operated by the same airline for 3 full IATA summer and winter seasons, which means end Sept ‘19 and March ‘20. At that time the operator, Flybe, has the right to operate those LHR slots on any Europeanroute.
Currently AF operate to CDG using slots which are not restricted as to use. My contention is that AF can use the Flybe slots for its European operations and either sell or use the, unrestricted, slots it previously used. There is a strong market for LHR slits, and a sale value of £30m per daily pair, Flybe have 7, is possible. I am not suggesting Flybe would get all of this but it is a very strong indicator that there is real underlying value here
I hope the negotiators for Flybe get this!
The below is a post I made at c10.30 today
Virgin has leverage as part of an alliance, SkyTeam, to free up the LHR slots and create real value as set out below. Lufthansa or other members of Star Alliance could do similar but have less benefit from UK regional feed. BA and One World would be limited as the slots at LHR that Flybe are using are restricted to use in Europe and are remedy slots which any association with BA via One World would contaminate and render worthless
Follow it through below, there is REAL AND MATERIAL value here for Sky Team/Virgin
This is worth multiples of the current share price, it needs realising and COW and advisers need to get it for shareholders
"Bit of a surprise to me initially, but I can see the logic from their shareholders perspective. Delta (48%), AF-KLM (31%) and Branson (21%) are the shareholders but still subject to EU Competition clearance. It’s all about the feed traffic to airports the shareholders operate long haul to or have long haul hub at in UK and Europe, being EDI, LHR, MAN, LGW, AMS and CDG. Flybe have code shares with Virgin and AF, but not Delta and I think now not with KLM although they used to. Flybe’s attraction is big market share, operations and slots at MAN, EDI and seven short haul slot pairs at LHR which will become theirs if they operate the slots for one more full IATA year beyond end March 2019. Each of Virgin and Delta operate out of each of those UK airports and hence highly value connecting passengers.in addition Flybe operate to from EXT, SOU, MAN, BHX, to CDG and AMS providing feed to AF-KLM hubs. These are big routes, probably 70k passengers a month and the feed is very valuable to AF-KLM. What Virgin will be looking for from the deal will be a relatively cheap and reliable method of delivering feed traffic, and comparing the cost of doing that with the benefits to them, plus what can be developed such as new Virgin and Delta operations from BHX, the absorbtion of the rump of Flybe into the AF regional business, HOP!, and evolving the use of the seven somewhat limited LHR slots Flybe will have access to, by for example swopping them for existing AF LHR slots which are used to fly to CDG and selling those unconstrained former AF slots to Delta or someone else for long haul operation for a really large sum of money.
The issue is whether Flybe and its advisers see the opportunity for Virgins shareholders and its value and are able to negotiate on that basis rather than getting dragged down to levels near the current MC.
So, in summary it’s about feed traffic to MAN,EDI, CDG and AMS and a shuffle of the (constrained to European operation) LHR slots Flybe will own in a year or so with current ( unconstrained )AF slots for which they could earn £30m per pair, and Flybe have seven pairs which can be used in the game of shuffle
Evercore and COW have a good hand here, but a rival suitor would help"
But if a surprise to me initially, but I can see the logic from their shareholders perspective. Delta (48%), AF-KLM (31%) and Branson (21%) are the shareholders but still subject to EU Competition clearance. It’s all about the feed traffic to airports the shareholders operate long haul to or have long haul hub at in UK and Europe, being EDI, LHR, MAN, LGW, AMS and CDG. Flybe have code shares with Virgin and AF, but not Delta and I think now not with KLM although they used to. Flybe’s attraction is big market share, operations and slots at MAN, EDI and seven short haul slot pairs at LHR which will become theirs if they operate the slots for one more full IATA year beyond end March 2019. Each of Virgin and Delta operate out of each of those UK airports and hence highly value connecting passengers.in addition Flybe operate to from EXT, SOU, MAN, BHX, to CDG and AMS providing feed to AF-KLM hubs. These are big routes, probably 70k passengers a month and the feed is very valuable to AF-KLM. What Virgin will be looking for from the deal will be a relatively cheap and reliable method of delivering feed traffic, and comparing the cost of doing that with the benefits to them, plus what can be developed such as new Virgin and Delta operations from BHX, the absorbtion of the rump of Flybe into the AF regional business, HOP!, and evolving the use of the seven somewhat limited LHR slots Flybe will have access to, by for example swopping them for existing AF LHR slots which are used to fly to CDG and selling those unconstrained former AF slots to Delta or someone else for long haul operation for a really large sum of money.
The issue is whether Flybe and its advisers see the opportunity for Virgins shareholders and its value and are able to negotiate on that basis rather than getting dragged down to levels near the current MC.
So, in summary it’s about feed traffic to MAN,EDI, CDG and AMS and a shuffle of the (constrained to European operation) LHR slots Flybe will own in a year or so with current ( unconstrained )AF slots for which they could earn £30m per pair, and Flybe have seven pairs which can be used in the game of shuffle
Evercore and COW have a good hand here, but a rival suitor would help.
https://www.thetimes.co.uk/article/easyjet-pays-bumper-dividend-despite-berlin-difficulties-25t3l5gf0?shareToken=b62dcf924cebe7c1b3da84d740baea66
Second to last paragraph
Hi exeter chief, yes I am certain. It's a condition specific to o the actual slots Flybe are using on LHR to EDI and ABZ which are slots provided by IAG as part of the remedy for EC competition concerns post the BMI takeover. In an attempt to provide more competition the slots can only be used on EDI, ABZ, NCE, Cairo and Moscow for an initial three full IATA seasons, and after the same carrier has operated them for that period they can be grandfathered and potentially sold on but with specific restrictions that they can in,y be used on any European destination plus Cairo and Moscow.
I will have a look at the paper you suggest, it is probably superseded to an extent by the Monarch ruling in Dec 2017, and certainly restrictions from the EC competition regulator do apply to the Flybe slots. They received them from IAG for free subject to the conditions attached
H1 statement note 13 shows very front end loaded lease commitment profile, albeit prior to the four E175 arrive in 2019. Nevertheless this profile gives huge flexibility in hand backs and negotiation of much cheaper secondary lease terms. But in four or five years some decision on a replacement fleet will be needed. Big decision
taylot/exetrchief don’t get carried away on the values of the LHR slots in themselves, because the ones Flybe operate when they become grandfathered are only allowed to be used for European flying and Cairo and Noscow. The real value in slots is if they can be used in long haul such as JFK, Tokyo, Sydney, Singapore etc. The returns are much lower on European flying but I am suite easy will know what are the juiciest routes, and as one of only two UK airlines allowed to fly to Moscow for example, easy could go big time for the Moscow route.
Nevertheless I do not think there has ever been a slot sale of ones restricted to where you can fly. But, easy getting in to LHR with a viable initial route portfolio is a massive opportunity for them and a Fox in the Hen House to the other operators, particularly BA
StartBright you ask an interesting question.
I said it will take quite a bit of work and easy have been preoccupied taking over and integrating Air Berlin which amongst other things will really underpin easy’s position in Germany and Berlin in particular. It may be that this has occupied management bandwidth. I don’t know if easy are going to bid, but I set out a rationale that shows it could be very attractive. It may be that the game changer which will be the realisation that the LHR slots become grandfathered in late 2019/early2020 allowing easy unfetteredaccess to fly 7 or more flights a day to anywhere in Europe and inveigle their way into the worlds most profitable airport for operators. BA is a sitting duck to easy.
easy have also now had long enough to digest the LGW slots it bought from Flybe in 2013/14 and I suspect these have been very profitable and have shown what can be done in the UK market as they have replaced Q400/EJets with Airbus which are so much cheaper per seat.
So in summary I don’t know why easy have t done this before, and they may not now, but it looks pretty compelling to me, particularly in a Brexit world where strengthening their position in the UK could be attractive
We shall see
Flybe could be a bonanza acquisition but it will take some work
Apart from the LHR slots which can be grandfathered in October 2019/March 2020 which give easy at least seven a day slots to operate anywhere in Europe plus Cairo and Moscow and the ability to infiltrate LHR and undercut BA as they have so successfully done at LGW......
There is then in addition to the strategic position at LHR there is a very substantial set of slot holdings at EDI, GLA, MAN, BHX, AMS, CDG and LCY all of which are categorised as level 2 or 3 by the slot regulator ACL. 3 means it's full and the slots have value as shown in the fall out of the Monarch administration.
Efficiency benefits by losing the Flybe admin and marketing teams, saving c£5m pa plus rationalising marketing saving at least another £5 pa
Renegotiating airport and ground handling deals to the much much lower easyJet rates which could be worth at least £5 per passenger, or up to £40m pa. I know this sounds incredible but it's a pretty accurate estimate given that in general Flybe pay rack rate at most airports and easy negotiate really hard, helped by the knowledge that they will generate big increases in passengers and hence revenues for airports in the form of parking fees, retail revenue plus more passengers meaning more landing fees.
There are undoubtedly others, but it's at least £50m pa plus the LHR incursion which is massively strategic and will give easy another dimension, and is something that Carolyn McCall the prior CEO was keen on.
I just hope that someone at Flybe and its advisers realises the scale of the opportunity for easyJet and creates a credible alternative bidder to extract value far in excess of the Net Asset position at Flybe. At a P/E of only 10 this is £500m plus huge strategic value in the various slot holdings
I am not a ramper, my posting history is testament to that, but the scale of what could be achieved is enormous, the question is are COW and co plus Evercore up to the task. They need to get BA and/or Ryanair in the frame as alternative bidders.
brown-dog, trading in slots has always been a bit of a black art. However the Monarch situation a year or so ago surprisingly clarified things a bit when the Court of Appeal ruled that an administrator is able to sell slots. The complication with the Flybe LHR slots is that until they have been operated continuously for three full IATA seasons there are no grandfather rights, which is what the administrator would be able to sell. So I think the answer is that if administration occurs prior to three full IATA seasons of operation you are right the slots will be lost in an administration.
BTFATH1 thanks. The European interest could materialise but I think it less likely than BA or easyJet, but I could be wrong. The most likely European carrier would be Air France KLM driven by the large fees traffic that Flybe provides to CDG and AMS from MAN, BHX, SOU, EXT, CWL in the main via codeshares. The onward long haul revenue to the rest of the world is huge, and Flybe’s code share is a cheap way of delivering it.
BA sold its holding in Flybe as it was no longer strategic to BA at that point, which was obviously before the LHR operation commenced in 2017
Flybe have operated the remedy slots for two full summer IATA seasons and are in the second winter IATA season at present, so this time next year the summer LHR slits will have grandfathered, and by March 2020 the winter ones will be capable of grandfathering too. So in airline planning terms it’s quite short term.
Been on a long road trip in US, and I come back to this mess!
Very active site since end October, with a lot of agenda driven and ill informed drivel
I won’t go into the numbers from H1 in detail as they are a bit stale and in any event there are only a few posters on here who can understand them or even care what they actually are.
Briefly, my reading of the situation is that COW’s turnaround plan is working, and but for fuel and currency issues the half year would have been a strong trading period. Load factor at 84% is remarkable and forward sales at 63% of H2 by mid November is excellent. They have enough cash to get through, but the underlying progress in COW’s plan need to continue to grow load factor, yield and reduce fleet size and costs. I believe this will happen.
The announcement of a sale process and strategic review is interesting. It may accelerate and crystallise matters in some surprising ways. On the sale front Stobart are in the frame but at a bigger strategic level I believe IAG and easyJet are where a bid will emerge. The 7 daily pairs of LHR slots used on EDI and ABZ are remedy slots from the bmi/BA deal in2012, which if operated for three sets of IATA seasons confer grandfather rights on Flybe. However the slots can only then be used on European routes, not long haul, plus Cairo, Moscow, which were specific competition concerns from the 2012 bmi/BA deal. So they won’t be as initially valuable as unrestricted slots which make huge profits on long haul. However to easyJet those grandfathered remedy slots could form the basis of an entry to LHR to begin the same incursion and growth process as they achieved so well at LGW where they have elbowed BA out of the way and now hold well over 50% of the slots. BA didn’t defend LGW but they will certainly do so at LHR against a disruptive operator like easyJet who can apply season by season for slots and can easily afford to buy a few pairs from other operators at LHR each year. BA cannot afford easyJet to get this foothold and will snuff out the challenge if they can by buying Flybe. Big stakes here.
And if a bid doesn’t come from one of those two then it’s either Stobart or no deal, which is fine by me. The share price now is a nonsense driven by hysterical media coverage and Aberforth, Wellcome and a few other Institutions bailing out to rebablance their portfolios and also dump losses into this financial year.
Anyway, I’m back and will continue to observe from the sidelines unless I feel I can add something interesting.
Dinoken, please see https://www.gov.uk/government/publications/flights-to-and-from-the-UK-if-theres-no-Brexit-deal And related links /aviation-safety-if-theres-no-brexit-deal and /aviation-security-if-theres-no-brexit-deal
As you will see these have not all been agreed by the EU, but should they not be then the CAA would not recognise reciprocal rights for EASA registered aircraft, crew and engineers, and safety procedures. Nose being cut off to spite face for AirFrance-KLM, Lufthansa, SAS, Iberia, Alitalia, etc etc.
Flybe have roughly 1/3 of their aircraft utilisation in EU operations
Hope this helps.
That news is a regurgitation of the preliminary announcement from July.
No update at the AGM, next hope is a pre close statement, but unlikely. Next news flow will probably be November 1/2 results.
All UK airlines down 3-5% today due fuel through $80 and latest Brexit aircraft “will be grounded” story. It’s a wind up by UK Gov’t, the CAA have contingencies in place to put emergency measures into law at v short notice that will align their regulation with EASA and end the “crisis” before it starts. But don’t let facts get in the way of a good panic.
Hi claretjay. Very quiet. Probably a combination of Sam’s legacy in hacking off a lot of people and a lull in news flow.
AGM was purely functional with no trading update. Perhaps we will get a pre close statement in the next couple of weeks pre end of half year, but Flybe don’t usually do that. Stobart’s bar out from bidding expires 22.9.18. so there might be some activity but I would have thought they would wait for some public data from the company before doing anything else. Gut feel says this should be a decent first six months due reduced fleet, higher revenue per seat and non repeated one iff costs from last year. Plus big provision against remaining E195’s should flatter this half year.
Anyone got any legitimate sentiment from the company?