Flybe has agreed to acquire a new airline, Flybe Ireland, from Ryanair for €1 million.
The deal is contingent upon the European Commission accepting Ryanair’s proposed takeover of Aer Lingus, and a successful bid by Ryanair for Aer Lingus,
Ryanair has agreed to transfer to Flybe Ireland 43 routes to 34 destinations; a minimum of nine Airbus A320 aircraft and 100 million euros. In addition the low cost carrier would also provide Flybe Ireland with forward sales cash and liabilities worth a further 50 million euros.
Commenting on the announcement 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.”
The new airline will have bases in Dublin and Cork, from where it will fly to 34 destinations. Under the terms of the deal, it will have the rights to use the Aer Lingus brand for up to three years.
The EC is expected to announce its decision on 6 March.
Flybe, which has already received acceptances from 64% of shareholders in support of the transaction, recently acquired BA Connect and Finncomm.