Defunct UK Regional Airline Flybe (BE/BEE) has been given a small glimmer of hope yesterday after Cyrus Capital advisor Jonathan Peachley told an australian newspaper that “It’s definitely not the case that we have abandoned Flybe,”
Flybe collapsed earlier this year when the airline failed to raise the cash needed to stay afloat from either its owners a consortium of Stobart Aviation, Virgin Atlantic and Cyrus Capital or the UK Government.
Its collapse in March meant thousands of staff from Pilots to Admin Staff lost their jobs overnight.
The airline was put into administration with Ernst Young (EY) who have been trying to find a buyer to keep the company going and also offloading assets to raise money to pay debts.
But the secretive hedge fund of Cyrus Capital, which is operated by Lucien Farrell has stayed relatively quiet on the airline since it collapsed.
The consortium bought the airline in an eyebrow-raising deal by effectively making the company worthless and buying up the shares for far below their previous value and created a company called Connect Airways Ltd to operate the airline.
This was done with a view to re-branding Flybe as Virgin Connect and having a more focused route network.
It soon became evident that the airline was in much deeper financial trouble that the consortium had anticipated though and it was unable to turn the airline around quickly enough before weakening sales due to the the coronavirus pandemic finally put the nail in the coffin for the airline.
But now, Cyrus Capital has told The Australian that it is very much still a stakeholder in the administration process.
According to the Australian, Mr 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.”
But with Scottish airline Loganair (LM/LOG) already taking over many of the regional UK routes once operated by Flybe many are doubtful that Flybe can come back in any meaningful form given its collapse over the best part of a decade.
Also, in an industry where consumer confidence is high, would passengers want to risk losing money twice?