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Virgin Atlantic Acquires FlyBe, Will Nearly Triple Fleet Size

Jan. 11, 2019
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3 min read
Flybe De Havilland Canada DHC-8-400
Virgin Atlantic Acquires FlyBe, Will Nearly Triple Fleet Size
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Virgin Atlantic is coming to the rescue of a large regional airline in the UK with plans to build out its regional fleet and route network.

Virgin has partnered with Stobart Group and Cyrus to purchase Flybe for £2.2 million in a cut price deal. The three companies will form a joint venture, Connect Airways, to manage the new airline. Flybe's stock dropped by 90% today after Flybe recommended shareholders take the £2.2 million deal — a far cry from the £300 million the airline was valued at less than five years ago

The Exeter-based carrier has faced financial troubles for the last few years after a failed takeover of another airline, rising fuel prices and Brexit uncertainty. The airline put itself up for sale in November after things became more dire.

Flybe is a regional airline that has a sizable fleet of 78 aircraft including turbprop ATRs and Bombardier Dash 8s in addition to a handful of Embraer E-Jets.

The value of shares in the Exeter-based airline Flybe, have fallen dramatically recently after the company issued another profit warning, blaming poor demand, a weaker pound and higher fuel costs. (Photo by Matt Cardy/Getty Images)

All Flybe aircraft will fly under the Virgin brand and be repainted in the airline's signature red and white colors — the acquisition will nearly triple the size of Virgin Atlantic's fleet, which only consists of 47 widebody Airbus and Boeing aircraft.

Flybe carries around 8 million passengers a year and flies to destinations around the UK, Ireland and continental Europe. Virgin primarily flies to long-haul destinations from its London and Manchester hubs, so the acquisition of Flybe will help it build out a network of regional flights and could provide connecting traffic to its long-haul operations.

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This is good news for points and miles collectors, as it's all but certain that passengers will be able to earn and redeem Virgin Atlantic miles and enjoy elite status benefits on flights formerly operated by Flybe aircraft. Virgin miles are currently valued at 1.5 cents apiece by TPG and the program has some great sweet spots with partners like ANA and Delta.

Virgin Atlantic, which is still part owned by its billionaire founder Richard Branson, attempted to enter the regional market in 2013 with the airline Virgin Atlantic Little Red, however its run was short lived and the airline shuttered in 2015.

Virgin Atlantic is quickly growing. Last May, Air France-KLM and Delta signed an agreement with Virgin to strengthen a joint venture and help create an even larger network for the airlines that was already quite massive. The Stobart Group, which will also take an ownership stake in Flybe, owns regional Irish airline Stobart Air and has said it wants to increase flights out of the two airports it owns, including London's Southend (SEN).

Featured image by NurPhoto via Getty Images

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  • Solid welcome bonus

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  • Some may have trouble using Uber and other dining credits
  • You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
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  • $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
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  • Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
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