Flybe, a UK-based airline company, is entering into an agreement with Ryanair, an Ireland-based low cost airline, to set up a new airline in Ireland.
The agreement forms part of Ryanair’s concession package for its protracted takeover of Irish airline, Aer Lingus.
The company intends to acquire the Flybe Ireland brand for €1 million, and Ryanair would inject around €100m into the new entity as part of the agreement. If the deal is successful, Ryanair will also be transferring 43 of its European routes to the new airline.
Flybe chief executive officer, Jim French, 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.’