Flybe in talks over sale but inviting other offers

The Exeter-headquartered carrier, which operates flights from Aberdeen, Edinburgh, Glasgow, Inverness, Stornoway and Wick, also signalled that it is looking to make cuts to costs and flight capacity as it battles challenging conditions in the airline industry.

It comes weeks after Flybe warned over profits following falling demand and a £29 million hit from rising fuel costs and the weak pound.

That alert sent shares tumbling by more than a third on the day and nearly 75% has been wiped off its stock market value since December.

However, shares in Flybe lifted 6% after news of its sale plans.

Read more: Flybe shares sink nearly 40% after profit warning

The firm said in a statement to the London Stock Exchange: "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."

Stobart Group walked away from a bid for Flybe in March after the two firms failed to agree terms.

But Stobart, which already has a franchise agreement with Flybe, could reportedly come back into the frame.

Shares in Stobart lifted nearly 2% on speculation over possible bid interest.

In half-year results also announced on Wednesday, Flybe saw cost-cutting help lift underlying pre-tax profits to £9.9m from £9.2m a year earlier.

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Statutory pre-tax profits for the six months to September more than halved to £7.4m from £16.1m a year earlier.

Last year, following the end of a long-term franchise agreement with Glasgow-based Loganair, Flybe initially went head to head with its former franchise partner on routes connecting Glasgow, Edinburgh and Aberdeen with destinations such as Stornoway, Kirkwall and Sumburgh, but Flybe gradually scaled back the services it offers to the Highlands and Islands.

Chief executive Christine Ourmieres-Widener said the group continued to see improvements in the third quarter and added that cost savings had already helped to drive progress in boosting profits.

She added: “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.”

Trade unions raised concerns over the impact of a potential Flybe sale on the carrier’s 2,300 employees.

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Brian Strutton, general secretary of the British Airline Pilots’ Association (Balpa), said it believes that Flybe "is fundamentally a sound airline and we will scrutinise any offers to buy Flybe very carefully to ensure continued employment is protected".

He said: "Flybe is the largest regional airline in Europe with 2,300 talented, committed employees in the UK who will be very worried to hear this morning that their company is up for sale.

"Despite warnings this will still be a bolt out of the blue."

He added: "We also expect to be consulted by Flybe and potential bidders over any future plans they have for the airline and its employees and we reserve our right to express our opinion and take any other steps in order to protect our members’ interests."

Oliver Richardson, Unite national officer, said: “Flybe’s workforce is the lifeblood of the airline, delivering excellent customer service, while working hard to ensure it remains profitable.

“News of a potential sale will be unsettling for workers.”

Flybe has 78 planes operating from smaller airports including London City, Southampton and Norwich, and flies to destinations across the UK and Europe.

It carries around eight million passengers a year.