The first major corporate casualty of the coronavirus crisis in the UK, Flybe, could be back in the air next year.
It was announced that the company, which folded in March as a collapse in demand for air travel exacerbated already deep financial turbulence, had been effectively bought out of administration by a firm affiliated to a former shareholder.
Sky News revealed on Saturday how hedge fund Cyrus Capital had entered talks with the regional airline’s administrators.
Image: More than 2,000 staff lost their jobs when Flybe collapsed
EY said it agreed to a sale of Flybe’s business and assets, including the brand, intellectual property, stock and equipment, to Thyme Opco for an undisclosed sum.
The administrator’s statement said: “While the transaction is still subject to certain confidential conditions, the deal is expected to allow the Flybe business to restart operations as a regional airline in the UK under the Flybe brand in early 2021.
“Following today’s announcement, the administrators will work together with Thyme Opco, the Flybe management team and the UK Civil Aviation Authority to prepare for the relaunch of Flybe’s airline operations.”
Flybe would be expected to emerge from the process a much leaner organisation – focusing on the most profitable routes.
That is because any restart of flying operations would be expected to only follow a recovery in demand as the aviation sector continues to be hit hard by the COVID-19 pandemic.
Where jobs have been lost in the UK
A Thyme Opco spokesperson said: “We are extremely excited about the opportunity to relaunch Flybe.
“The airline is not only a well-known UK brand, it was also the largest regional air carrier in the EU, so while we plan to start off smaller than before, we expect to create valuable airline industry jobs, restore essential regional connectivity
in the UK and contribute to the recovery of a vital part of the country’s economy.”
Analysis by Sky News of the employment landscape shows the aviation industry has, so far, been worst affected by the disruption with more than 34,000 jobs lost to date.
Flybe was Europe’s largest regional airline, carrying around nine million passengers annually at its peak and accounting for 40% of domestic UK flights.
But a rescue deal early last year failed to stem mounting losses and talks over a £100m state loan floundered.
The collapse led to the loss of 2,400 jobs and it is unclear how many roles the revived Flybe will create.
The pilots’ union, BALPA, said of Monday’s announcement: “A renewed Flybe would hopefully restore the vital air connections in the regions and nations of the UK and boost the economic recovery.
“Flybe staff were the first and most badly affected by the coronavirus crisis which has gone on to ravage the entire industry.
“This news will give everyone a degree of confidence that recovery is coming soon, and that their skills and knowledge are still going to be vital.”
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, noted a positive reaction from investors too.
She wrote: “Although the wider FTSE 100 slipped into the red, shares in easyJet, IAG (BA’s parent) and Ryanair rose, as investors appeared to glimpse recovery for air travel on the horizon following Thyme Opco’s acquisition of Flybe.”