Easyjet to buy Gatwick slots from Flybe?

It has been reported that UK-based low-cost air carrier easyjet is in talks with rival no-frills carrier, Flybe, with regards to buying some of the latter’s Gatwick take-off and landing slots.

The Sunday Times reported that the talks were taking place, and although neither of the airlines was initially prepared to comment, in a statement to the London stock exchange this morning, Flybe said, ‘Flybe notes the recent speculation in the press. The board announces that it is in discussions with a number of parties, which may or may not lead to a transaction regarding the exchange for compensation payment of the arrival and departure slots at Gatwick airport. Discussions are ongoing and there can be no certainty as to whether any transaction will be forthcoming. A further announcement will be made as soon as appropriate.’

If an agreement is reached with easyjet it would be considered a win-win for the two companies. Flybe has a need to raise cash in the light of recent disappointing financial results, and offloading its 25 Gatwick slots could earn the company a cash injection of £20 million. Easy jet, meanwhile, has expansion plans that are being handicapped by lack of airport capacity, especially in the busy southeast of the UK, so the new slots at Gatwick would provide them with a welcome boost.

However, as Flybe’s statement infers, easyjet will not be the only competitor airline that the seller is talking to, and bidding could be brisk for what is an increasingly valuable commodity.