Futures Forum: Brexit: and Flybe's warnings
It's now back in the news:
Flybe: everything you need to know about the ailing airline | The Independent
And the question is why:
Flybe up for sale as airline struggles with high oil prices | The Independent
Flybe to be sold or merged thanks to Brexit - Devon Live
Brexit and fuel costs force airline Flybe to put itself up for sale - Sky News
The District Council's Leader has appeared on BBC Spotlight showing support for the business - and has issued the following statement:
14 November 2018 - Civic leaders support Flybe's important contribution to economy - East Devon
East Devon's MP will be meeting with transport minister:
Hugo Swire on Twitter: "Very concerned about this news. I am attending a meeting at the airport on Friday with the minister Baroness Sugg.… "
And Exeter's MP is not happy either:
Flybe up for sale - Radio Exe
Ben Bradshaw on Twitter: "Worrying news re more job losses at #Flybe #Exeter Govt *must* review damaging impact of Air Passenger Duty on regional airlines & airports"
The area's business community are very concerned about the potential impact:
Flybe must stay in Exeter, say business bosses - Devon Live
Everyone is referring to the impact of Brexit, though:
Flybe to be sold or merged thanks to Brexit
Neil Shaw
14 NOV 2018
WATCH NEXT Flash sale as Flybe slashes cost of one million flightsFlash sale: Flybe offers 1million tickets at up to 20 per cent off
Flybe takeover talks see shares rocket by 24 per cent
Exeter-based airline Flybe is to be sold or merged and bankers have been brought in to seek a potential deal, reports Sky News. The move was announced to the London Stock Exchange on Wednesday morning and comes after a recent profit warning and amid uncertainity over Brexit.
Sky says bankers Evercore were brought in to negotiate a sale or takeover in the face of a weaker pound and higher fuel costs.
In a statement released at 7am Flybe said: "The Board of Flybe Group plc ("Flybe" or the "Company") announces today that it is undertaking a comprehensive review of the various strategic options open to it to address the current challenges facing the airline industry and maximise value for shareholders. These options include further capacity and cost saving measures, initiatives to strengthen the balance sheet and preserve cash resources, as well as a potential sale of the Company through the commencement of a "formal sale process" (as referred to in Note 2 on Rule 2.6 of the Code). The Board has appointed Evercore as its financial adviser to assist it with this review."
The statement adds: "The Company confirms that, at the time of this announcement, it is in discussions with a number of strategic operators about a potential sale of the Company. Parties with a potential interest in making a proposal should contact Evercore."
Flybe's interim results were announced at 7am today. Sky says Stobart group, owner of Southampton Airport, may buy the Devon airline.
Addressing Brexit in the 7am announcement, in which Flybe revealed a profit of £14million, Flybe said: "Brexit remains a major uncertainty for the sector and the wider economy. The Government continues to negotiate the UK's exit from the European Union but has not yet reached an agreed deal. In relation to aviation, the various Government papers on Brexit set out the issues facing the industry and failure to reach an agreement may put at risk, or damage, parts of the business.
"The "no-deal" Brexit proposals give a 14 month stand off period, thus giving more time for consideration of alternative strategies and solutions if required. The Board believes that an appropriate agreement will be reached, although it is also developing contingency plans including potentially reassigning contracts that could be directly affected."
Christine Ourmières-Widener, Flybe Chief Executive Officer, said: "In line with our strategy, we reduced seat capacity in the first half by 9.0% delivering a 7.2% increase in revenue per seat. Continued improvements are being seen into quarter three which demonstrates the popularity of Flybe for our customers.
"However there has been a recent softening in growth in the short-haul market, as well as continued headwinds from higher fuel and currency costs. We are responding to this by reviewing every aspect of our business, especially further capacity reduction, cash management and cost savings. This is already starting to have a positive impact, as shown by the improved first half adjusted profit before tax; however, we must do more in the coming months. We remain confident in the vital role that Flybe plays in UK connectivity."
Exeter-based airline Flybe is to be sold or merged and bankers have been brought in to seek a potential deal, reports Sky News. The move was announced to the London Stock Exchange on Wednesday morning and comes after a recent profit warning and amid uncertainity over Brexit.
Sky says bankers Evercore were brought in to negotiate a sale or takeover in the face of a weaker pound and higher fuel costs.
In a statement released at 7am Flybe said: "The Board of Flybe Group plc ("Flybe" or the "Company") announces today that it is undertaking a comprehensive review of the various strategic options open to it to address the current challenges facing the airline industry and maximise value for shareholders. These options include further capacity and cost saving measures, initiatives to strengthen the balance sheet and preserve cash resources, as well as a potential sale of the Company through the commencement of a "formal sale process" (as referred to in Note 2 on Rule 2.6 of the Code). The Board has appointed Evercore as its financial adviser to assist it with this review."
The statement adds: "The Company confirms that, at the time of this announcement, it is in discussions with a number of strategic operators about a potential sale of the Company. Parties with a potential interest in making a proposal should contact Evercore."
Flybe's interim results were announced at 7am today. Sky says Stobart group, owner of Southampton Airport, may buy the Devon airline.
Addressing Brexit in the 7am announcement, in which Flybe revealed a profit of £14million, Flybe said: "Brexit remains a major uncertainty for the sector and the wider economy. The Government continues to negotiate the UK's exit from the European Union but has not yet reached an agreed deal. In relation to aviation, the various Government papers on Brexit set out the issues facing the industry and failure to reach an agreement may put at risk, or damage, parts of the business.
"The "no-deal" Brexit proposals give a 14 month stand off period, thus giving more time for consideration of alternative strategies and solutions if required. The Board believes that an appropriate agreement will be reached, although it is also developing contingency plans including potentially reassigning contracts that could be directly affected."
Christine Ourmières-Widener, Flybe Chief Executive Officer, said: "In line with our strategy, we reduced seat capacity in the first half by 9.0% delivering a 7.2% increase in revenue per seat. Continued improvements are being seen into quarter three which demonstrates the popularity of Flybe for our customers.
"However there has been a recent softening in growth in the short-haul market, as well as continued headwinds from higher fuel and currency costs. We are responding to this by reviewing every aspect of our business, especially further capacity reduction, cash management and cost savings. This is already starting to have a positive impact, as shown by the improved first half adjusted profit before tax; however, we must do more in the coming months. We remain confident in the vital role that Flybe plays in UK connectivity."
Flybe to be sold or merged thanks to Brexit - Devon Live
And things are not helped by the further uncertainty today:
UK-exposed stocks tumble as Brexit uncertainty grows
Bryce Elder 5 HOURS AGO
Stocks exposed to the UK economy tumbled on Thursday as parliamentary resignations over Prime Minister Theresa May’s draft EU withdrawal agreement threw the Brexit process into chaos.
Royal Bank of Scotland suffered its biggest fall in more than two years, losing nearly 10 per cent on fears of slower economic growth, rising defaults, business disruption and the tail risk of a break-up under a Labour government.
A plunge for the pound helped support the multinational-heavy FTSE 100, but sectors reliant on domestic earnings and those exposed to political risks were hit hard. Indices tracking UK electricity companies, transport operators and general retailers all fell more than 4 per cent, while those tracking banking, telecoms and life insurance retreated about 3 per cent.
“UK earnings recovery is in full swing for UK plc,” said Citigroup analyst Jonathan Stubbs. “This likely continues barring a hard landing in the UK or the end of the global cycle . . . Brexit-related risks could end this earnings recovery.”
EasyJet and Ryanair weakened about 7 per cent on concern that flights might be grounded by a no-deal split from the EU. Domestic airline Flybe, which earlier this week put itself up for sale, dropped 16 per cent.
UK-exposed stocks tumble as Brexit uncertainty grows | Financial Times
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