Flybe Ireland to be created

By Victoria February 6, 2013 14:49

Flybe Ireland to be created

Flybe has agreed to pay Ryanair €1 million to create an Irish carrier to be called Flybe Ireland but only in the event of a successful bid by Ryanair for Aer Lingus.
Flybe has also confirmed that it had reached contractual agreement with Ryanair over the transfer of a number of aircraft and operating routes as part of a package of concessions that Ryanair has submitted to the European Commission, in the context of its offer for Aer Lingus.
If Ryanair acquired Aer Lingus it would transfer to Flybe Ireland: 43 European routes; a minimum of 9 Airbus A320 aircraft; the requisite number of flight crew, aircraft engineers, management and facilities; and the required number of slots to operate the 43 routes. Ryanair will also capitalise Flybe Ireland with €100m of cash as well as the forward sales cash from the 43 routes. Ryanair is also committing to deliver Flybe Ireland a cost base that should allow it to deliver solid profitability.
In a statement Flybe has said that it believes the transaction represents good value to shareholders; is in line with company strategy; and leverages the company’s proven skills in mergers and acquisitions, having previously successfully acquired BA Connect (UK, £350m turnover, 1,770 staff), and Finncomm (Finland, 500 staff, €100m turnover).
Flybe has also confirmed that it has already received irrevocable acceptances from 64% of shareholders in support of this transaction.
“Flybe looks forward to having the opportunity to serve the Irish aviation market. Flybe is proud of its track record as a good employer and corporate citizen. Flybe would seek to operate to the same values in Ireland. Flybe has long standing trade union recognition rights, and developed consultation processes. Flybe currently serves Dublin from various points in the UK,” the airline said in a statement.
Jim French, Flybe’s Chairman and Chief Executive Officer, said: “Flybe would be delighted to be granted the opportunity to service the Irish aviation market through Flybe Ireland, an airline which would be based in Ireland and dedicated to developing a broad range of scheduled services for business and leisure markets.
“This development of creating a Dublin based airline is in line with the Company’s stated strategy at the time of IPO – which was to diversify away from reliance upon the UK economy. The terms of the deal negotiated ensure that Flybe Ireland will be a well-capitalised, well-funded company, enabling us to deliver upon that strategic aim. Flybe has a history of acquiring businesses of scale, restructuring and refocusing them and as a result delivering profitable returns. This opportunity plays clearly to that corporate strength.
“Flybe would be proud to have the chance to serve the Irish markets, and would be, as we seek to be throughout the rest of Europe, a good employer and corporate citizen.
“However, before Flybe Ireland can come into being there are many hurdles to overcome, not least the EC accepting the remedies offered by Ryanair in its offer to take over Aer Lingus, and then the shareholders of Aer Lingus accepting an offer from Ryanair. However, Flybe has positioned itself well if these events come to pass, while in the meantime we continue to focus upon the delivery of the cost reduction and efficiency plan we outlined in January.”

By Victoria February 6, 2013 14:49
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