It seems International Airlines Group (IAG – owner of Aer Lingus, British Airways, Iberia, LEVEL and Vueling) is joining the battle for FlyBe.
Flybe Dash8 Q400 at Hamburg Airport – Image, Economy Class and Beyond.
As we all know, Flybe is in more than a spot of bother – with the airline placing itself up for sale. Virgin Atlantic has had declared its interest in the airline, so it shouldn’t be surprising that IAG should join the party
The Sunday Telegraph broke the story (Paywall), and Reuters is noting shares are in FlyBe are rising with IAG possibly joining the takeover talks party.
Stobart Air is also interested in FlyBe too.
A good idea at all?
If IAG were seriously interested in taking control of FlyBe, there would be more than a few issues – with the regulators possibly taking a very hard look at this transaction.
Why?
IAG (as we all know) is the dominant slot owner at Heathrow Airport through its British Airways and Iberia operations. Another 7 slots (which it was forced to give up with the purchase of British Midland), would be useful – but you can see those slots being relinquished as part of any settlement.
In addition, the regulators could be unimpressed that IAG is coming back to the UK regional market – after abandoning the old BA Connect operation to… you guessed it – FlyBe.
Certainly, IAG has the muscle to push this through and make connections work – or feed into the London hubs if it chose to (or heck – it could feed into a secondary hub out of London).
It could work – but a good idea? It’s questionable.
Haven’t we been here before?
Those who were around when British Midland International was sold off should more than recognise this picture. It is a slightly different picture, with BMI having a mainline operation, a regional operation and a low-cost carrier.
For those with short memories, the mainline operation was sold off, and the slots utilised out of Heathrow, the regional operation was sold onto a 3rd party (who are slowly growing the airline), and the Low-Cost carrier was shut down.
Is it all about the slots? Or can IAG transform regional flying?
Now, the situation her is slightly different, with Flybe operating a minimal number of flights in and out of Heathrow, but you can bet IAG’s competitors will see this as another attempt at a slot grab.
However, that still leaves a fleet of Dash 8 and Embraers doing regional flying – and there’s a chance maybe to convert FlyBe into a LEVEL type operation that could shake the regional travel game up.
And maybe there is room for that.
However, IAG knows that whilst EasyJet and Ryanair aren’t interested in FlyBe – they will be monitoring the routes and seeing which ones are viable to operate.
And there-in maybe the real challenge if FlyBe falls by the wayside.
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