Flybe shares soar on talk of buyout
The media’s financial writers continue to focus on the future of Flybe, with many claiming IAG has joined the race to buy the regional carrier. Reports focus on the Exeter-based airline’s share performance over the past few days which has seen sharp increases as buyout speculation continues. IAG has declined to comment on the speculation.
Virgin Atlantic in talks to buy Flybe
Almost every weekend newspaper ran stories about Virgin Atlantic being reportedly in talks over a possible buyout of Flybe. The headlines of this emerging story reported that Flybe’s share price rose more than 70% when the news broke last week. Additionally reporters noted that Virgin Atlantic’s previous attempt at launching a shourthaul airline (Little Red) was a failure, and that if Virgin Atlantic were to acquire routes between London and Scotland, it would put them in direct competition with their fellow Virgin business, Virgin Trains. Some sources additionally reported speculation that IAG is also interested in acquiring Flybe. Virgin Atlantic and IAG have both declined to comment on speculation and rumours.
Travel expert Simon Calder notes that taxpayers will subsidise a new Flybe route between Heathrow and Newquay, with the airline “losing around £7000 per hour”.
Flybe strikes lifeline deal
Budget carrier Flybe has struck a lifeline deal to keep flying by selling one of its hangars for £5 million.
The airline will pay an annual rent of £515,000 for the facility at Exeter and Devon Airport, reports the Daily Mail.
Flybe is under pressure to stay afloat, after warning its full-year losses are set to hit £22 million, blaming falling demand for flights, rising fuel costs and the weaker pound.