November 3, 2006 at 7:59 am
From flybe.com:
Flybe agrees to acquire BA Connect
FLYBE TO BECOME LARGEST REGIONAL AIRLINE IN EUROPE
Flybe announces that it has reached agreement in principle with British Airways whereby it will acquire British Airways’ BA Connect regional airline business, subject to a number of conditions precedent including the completion of due diligence.
The proposed acquisition will create an enlarged business with over £600m in revenues and carrying nearly 10 million passengers. The business will be operated in line with the successful Flybe business model concentrating on short haul domestic and European major city markets.
BA will ensure that the new business has sufficient funding in order to achieve its growth targets and the transition out of the current BA Connect fleet. In return it will acquire a 15% stake in the new business.
The acquisition (which does not include BA Connect’s London City or Manchester / JFK routes) will significantly increase Flybe’s route network both in the UK and continental Europe making Flybe Europe’s largest regional airline.
The new larger Flybe will have the following dimensions:
159 Routes, including 35 new routes
10 Million Passengers
£600m in revenues
Europes largest regional airline
Operating from 23 UK and 36 European airports
70 aircraft by the end of 2007
Whilst reinforcing Flybe’s domestic UK presence, the acquisition will also result in an increase in the proportion of Flybe’s business passengers with new routes to key European commercial centres including Paris, Düsseldorf, Frankfurt and Milan.Flybe plans to accelerate its current fleet renewal programme and will phase out all of the existing BA Connect fleet as soon as possible. The current Flybe £1.2bn investment programme in Bombardier Q400 and Embraer 195 aircraft will be complete by 2009. At that time Flybe will have a fleet of 82 aircraft, which will be one of the youngest and most environmentally sensitive fleets in the world. In line with its environment policy Flybe will by then have reduced fuel consumption by over 50% per seat.
The acquisition comes as Flybe announces its strongest ever summer trading period, resulting in an operating profit of £20.5 million* for the six months to 30th September 2006, which compares to an operating profit of £12.4 million* in the same period on 2005.
This summer’s result follows a solid performance in the financial year 2005/2006 when the business delivered operating profits, before exceptionals, of £4.8 million whilst pursuing a focused strategy of major route expansion to position the business for long term profit growth. The decision was also taken to write down the asset value of its BAE 146 Aircraft which will be retired over the next 12 months by taking a £6.4 million exceptional charge.
With its strategic platform in place, and the business delivering the promised strong trading results, Flybe is well positioned to take the next step in its evolution, by purchasing BA Connect.
The Board of Flybe has taken the decision that, in the event of the successful acquisition of BA Connect, any change to the current ownership structure should be deferred, to allow for the management team time to focus fully on the integration of the enlarged business.
Commenting on the proposed acquisition, Jim French, Chairman and Chief Executive of Flybe, stated:
“Through this acquisition we are seeking to build a bigger, stronger and even more defensible Flybe.
The Flybe business model concentrates on domestic and European city markets and has been incredibly successful over the last 4 years. This acquisition will allow us to bring our growth plans forward by two years.
The new enlarged Flybe should provide strong employment prospects for operational staff in BA Connect. Once the acquisition is completed Flybe will seek to replace BA Connects existing fleet with the fuel-efficient and environmentally friendly Bombardier Q400 and Embraer 195.
Flybe is proudly headquartered in, and serves the UK regions. We believe this announcement today means that the UK regions will now have their own strong and well financed airline, designed to support the needs of the buoyant regions of the UK, in line with the Government White Paper of 2003.
This acquisition will make Flybe the largest regional airline in Europe and one of the largest in the UK by any measurement. Across Europe more consumers will benefit from Flybe’s efficient and friendly service at a price, which provides outstanding value.”
Copyright © Flybe 2006
Flybe is not responsible for the content of external internet sites
Accrodibg to : This Article
– BA will have a 15% stake in Flybe
– Deal excludes London City Routes and Manchester – JFK.
OMG! I am really shocked at this. BA cONNECT IS NO MORE?
What do guys think?
By: Richard Taylor - 6th November 2006 at 08:22
What must employees or ex-employees of the likes of Brymon & Cityflyer Exp think of the recent announcement?
2 good independent airlines who made the mistake of becoming BA franchisees, then shafted by BA.
They could still have been operating today but for BA’s meddling.
Well done BA…………………..NOT. 😡
By: JohnSwitzer - 5th November 2006 at 23:32
As a regular traveller, I was shocked to hear of flyBe’s acquisition of BACon. When I first began flying regularly in the mid to late 90s, it now seems strange to think that 90% of the time I flew with BA or a BA franchise / subsidiary. These days I fly more often than ever before (c.70 flights a year) and yet the last time I flew with BA was 18 months ago.
I can also recall around 5 years back flying across on a CRJ200 from LBA to BHD on (what was then) British European, sat beside one of the airline’s top brass who admitted that he was sure there was an answer to British European’s woes, but he was beggared if he or anyone else knew what it was.
If someone was to suggest five years hence that British European would have acquired BA’s regional interests, I think they either would have been drunk or deluded.
flyBE has certainly put in a strong performance over recent years within its chosen niche. And it is an airline I enjoy travelling with. Staff are friendly and courteous and the Q400 and BAe146s make for a pleasant change from the 737 and A319/320 norm. But in the admitted absence of knowing just what flyBE paid for BACon, I can’t help but wonder if they’ve bitten off more than they can chew?
The much vaunted BACon ‘comeback’ on the BHD-BHX route prove that BACon are little threat to flyBE, just as BACon’s continued downsizing of aircraft from BAe146s to Dash8-200s on the MAN-BHD route prove the appeal of flyBE’s business model over BAcon’s. So in essence, organic growth probably would have taken to where they want to be, without the hassle of losing an entire fleet, integrating staff with very different corporate cultures, managing redundancies and figuring out what to do with inhereited liabilities.
I also think it is worth remembering that in the mid90s, British Regional Airlines was on the up, in a similar way in which flyBE is today. A decade later and it’s history. And that would be my concern with flyBE. Just how robust is the flyBE business model?
BHD-LPL certainly prove that they can’t cut the mustard on regional routes when it comes to mixing it with easyJet. So too BHD-BRS, which is now down to a single flight a day. So too BHD-STN which was pulled shortly after Go launched BFS-STN.
To my mind flyBE’s success is based upon commercialising regional routes, which as a result of flyBE’s efforts will become a target for easyJet, Ryanair, Jet2 or whoever, with lower costbases, jet fleets, even better brand awareness and lower fares. And unless and until flyBE strengthens (recofnfigures?) its business model, where does it go after that?
Regards
John
By: Robertt - 4th November 2006 at 14:24
True Blue, congratulations for cutting and pasting your posts on PPrune on to this forum! Flybe are not alone in hyping up new routes just look at the trash press releases that both Easyjet and Ryanair and now Jet 2 issue – in fact, Jet 2 now have the audacity to call themselves “Belfast’s Low Cost Airline” when they don’t even operate from anywhere near Belfast!. When do you ever see any airline actively publicise dropping a route – the aforementioned airlines have all dropped routes without notice and seldom give a valid reason for doing so – remember the Jet2 fiasco over BFS – ORK and BOH a while back?
What is the problem with Flybe saying they will increase MAN frequencies? Would this not be a natural thing to do since BA Connect will be no more? I would say that WW would need to start worrying at BFS!
No, the natural thing to do is to cut capacity, increase fares and actually start making some money. There is massive over capacity between Northern Ireland and the North West of England. Something was always going to give and here we are. And what’s with the BHD vs BFS garbage? What next I wonder, people feuding over North Terminal vs South Terminal at Gatwick????
By: allmcc - 4th November 2006 at 12:01
I think Flybe, more than any other, is always trying to put this great spin on their news to make it seem much better than it really is.Everywhere is a base. Every time they announce a new route at Bhd, same old story, further expansion etc, never do they say but we have dropped this route or that.
It won’t be long before they are out of Ncl and Lba just like Brs at Bhd. More rubbish quotes from flybe in the Belfast Tele tonight, the takeover of bacon gives them the opportunity to consider large increases in frequencies on routes, like Bhd – Man, up to about 10 a day. What they don’t say is that 10 a day is about the current frequency between Flybe and Ba. More of the same rubbish that they used to spout about their position on the Ncl – bhd route, major player and all that. A quick check tonight on prices to Galway and doncaster tells me that you will see them go the same way as Nwi and Lpl. Is’nt it great to be so selective with the facts.
True Blue, congratulations for cutting and pasting your posts on PPrune on to this forum! Flybe are not alone in hyping up new routes just look at the trash press releases that both Easyjet and Ryanair and now Jet 2 issue – in fact, Jet 2 now have the audacity to call themselves “Belfast’s Low Cost Airline” when they don’t even operate from anywhere near Belfast!. When do you ever see any airline actively publicise dropping a route – the aforementioned airlines have all dropped routes without notice and seldom give a valid reason for doing so – remember the Jet2 fiasco over BFS – ORK and BOH a while back?
What is the problem with Flybe saying they will increase MAN frequencies? Would this not be a natural thing to do since BA Connect will be no more? I would say that WW would need to start worrying at BFS!
By: True Blue - 4th November 2006 at 10:41
I think Flybe, more than any other, is always trying to put this great spin on their news to make it seem much better than it really is.Everywhere is a base. Every time they announce a new route at Bhd, same old story, further expansion etc, never do they say but we have dropped this route or that.
It won’t be long before they are out of Ncl and Lba just like Brs at Bhd. More rubbish quotes from flybe in the Belfast Tele tonight, the takeover of bacon gives them the opportunity to consider large increases in frequencies on routes, like Bhd – Man, up to about 10 a day. What they don’t say is that 10 a day is about the current frequency between Flybe and Ba. More of the same rubbish that they used to spout about their position on the Ncl – bhd route, major player and all that. A quick check tonight on prices to Galway and doncaster tells me that you will see them go the same way as Nwi and Lpl. Is’nt it great to be so selective with the facts.
By: chrism20 - 4th November 2006 at 01:17
Meant to add i’m surprised they are not keeping INV/LGW and returning it to mainline i’ve boon on those services a lot over the past 9 months and they are always quite busy, also one of the few BACON flights I have taken and seen them actually sell a lot food & drink
By: chrism20 - 4th November 2006 at 00:37
BA will need to keep some of the RJ100’s (in the meantime at least), I don’t fancy seeing the trying to land a 737 or domestic equivalent at LCY
By: Oasis747 - 3rd November 2006 at 21:15
Very interesting news. I wish them luck if it all goes through:):):)
By: Ren Frew - 3rd November 2006 at 19:54
Does this mean BA will become the largest “regional” airline in Britain ? :diablo:
By: kev35 - 3rd November 2006 at 19:38
“Yeah I know but for a good few years there would slowly replace them but now they have shortly it.”
Good God It’s Yoda!
Reagrds,
kev35
By: Manston Airport - 3rd November 2006 at 19:30
It said on teletext that they are selling BACON due to what happened in Ausgust. :confused:
is that true?
James
By: manchestersam - 3rd November 2006 at 17:26
I’m actually glad at this proposal. BA really don’t give a hoot about anywhere (bar LHR/LGW). Good riddence to them. I welcome more BE flights from MAN and good luck to them, will be nice to see more of them around!:D
By: LBARULES - 3rd November 2006 at 13:30
Quite surprising news, but at least now we have a regional airline that seems to be commited to the regions, rather than BA who never seemed that interested!
By: Manston Airport - 3rd November 2006 at 11:34
They were on there way out any way mate.
Good for flybe, Flybe are after all a business mans airline and there merely takng over the competition.
Yeah I know but for a good few years there would slowly replace them but now they have shortly it.
James
By: lukeylad - 3rd November 2006 at 11:02
Farewell Flybe’s BAe 146 fleet
They were on there way out any way mate.
Good for flybe, Flybe are after all a business mans airline and there merely takng over the competition.
By: bmi-star - 3rd November 2006 at 11:01
Says they will oust the ERJ, DH8 and 146, and replace them with 195’s and Q400’s
Wonder if flybe will move into T3 at MAN too?
By: Manston Airport - 3rd November 2006 at 10:56
I am sort off glad that its not Flybe going but not so good that BACON are going. What will happen to BACON fleet will they be sold to BA?
Farewell Flybe’s BAe 146 fleet
James
By: cheesebag - 3rd November 2006 at 10:11
Wow…Looks like BHX will become Q400 and Embraer 195 city!!!!
By: bmi-star - 3rd November 2006 at 10:05
Sorry but thats what it said in my email :p
But its a bit ovbious it probably will go ahead, Mainline have been trying to get rid of BACX/BACON for some time
By: jethro15 - 3rd November 2006 at 09:42
OMG! I am really shocked at this. BA cONNECT IS NO MORE?
What do guys think?
Carefull. The opening paragraph clearly staes:
‘Flybe announces that it has reached agreement in principle with British Airways whereby it will acquire British Airways’ BA Connect regional airline business, [B] subject to a number of conditions[/B] precedent including the completion of due diligence’
It is NOT a done deal yet, and as such the thread title is a little missleading.