Struggling Flybe is to be rescued by a new company called Connect Airways comprising Virgin Atlantic, Stobart Group and Cyrus Capital, it has been confirmed.
It has made a cash offer for the airline, following which Connect Airways will acquire the entire issued, and to be issued, share capital of Flybe. Stobart Group will contribute Stobart Air and Propius, Stobart’s aircraft leasing business.
Cyrus, Stobart Group and Virgin Atlantic have committed to make available a £20 million bridge loan facility to support Flybe’s ongoing working capital and operational requirements.
Following completion of the acquisition, Cyrus, Stobart Group and Virgin Atlantic are intending to provide up to £80 million of further funding to the combined group to invest in its business and support its growth, as well as a contribution of Stobart Air.
It will be business as usual for Flybe, the consortium said, but in due course Flybe will be rebranded to Virgin Atlantic.
That said the group intends for Flybe to continue as an independent operating carrier with a separate UK air operator certificate (AOC) under the Virgin Atlantic brand. Stobart Air is intended to continue under a separate Irish AOC.
The group will operate independently to Virgin Atlantic under one management team, owned 40% by Cyrus, 30% by Stobart Aviation, a wholly owned subsidiary of Stobart Group, and 30% by Virgin Atlantic, the holding company of Virgin Atlantic Airways and Virgin Holidays.