According to an advisor for private equity and investment advisory firm Cyrus Capital, the now-defunct United Kingdon regional airline, Flybe could be given a new lease of life. This latest news comes after an advisor for the investment group told an Australian newspaper on Thursday that Cyrus Capital had not abandoned Flybe.
The Exeter-based airline collapsed earlier this year after failing to raise enough cash from its owners or the United Kingdom government to stay afloat. Flybe’s owners included a consortium made up of Stobart Aviation, Virgin Atlantic, and Cyrus Capital.
Flybe collapsed in early March
In March, after continuing to suffer financial difficulties, Flybe decided to call it a day. It realized that the looming COVID-19 crisis would be the final nail in the coffin. On the morning of March 5, the airline ceased all flights and filed for administration. This move effectively put thousands of employees out of work. Professional services firm Ernst Young (EY) was brought in to find a buyer for the troubled airline and started to offload assets to cover some of Flybe’s debt.
While all this was happening, the highly secretive Cyrus Capital remained eerily quiet of the goings-on. Cyrus Capital originally bought Flybe by effectively making the airline worthless and then buying up all its shares. Once they had a controlling interest, they rebranded the airline as Connect Airways Ltd intending to change it to Virgin Connect later. Unfortunately for Cyrus Capital, the airline was in a worse financial position than they thought. Despite its efforts to bring the airline back to life, the coronavirus crisis was too much to handle.
Cyrus Capital wants Flybe to emerge from administration
Now according to the website UKAviation.news quoting Australian conservative broadsheet newspaper The Australian, Cyrus Capital has said they are very involved in the administration process. When speaking about Cyrus Capitals investment in the airline advisor, Jonathan Peachey said,
“We invested as part of a consortium with three shareholders. The shareholders committed over £100 million to the business.
“We invested everything that we had committed to invest and an additional sum in the months prior to the business going into administration as a result of the impact of Covid-19.
“We are in regular contact with the administrator, and we are doing everything we can to ensure that the business can emerge in some form from administration.
“There’s still a demand for regional connectivity in the UK.
“Cyrus is doing everything it can, along with the other consortium members, to ensure that a business emerges that can re-hire the many thousands of employees who were dependent on it.”
Loganair has taken over many of Flybe’s routes
Since Flybe’s collapse, Scotlands Loganair has stepped in to pick up Flybe’s lucrative routes casting doubt about how Flybe can come back in a meaningful way. Also, given the current state of affairs in the aviation industry, now would not appear to be a good time to start an airline.
Do you think that Flybe can rise from the ashes? Please let us know your thoughts in the comments.