Flybe has agreed to the €100m (£85.8m) Ryanair’s proposal to operate around 43 of Aer Lingus short-haul routes out of Ireland. The loss-making British airline will team up with Ryanair to create Flybe Ireland, on condition that the Ryanair-Aer Lingus bid gains regulatory approval. Flybe has confirmed that it would pay Ryanair €1m (£866,000) for the newly created airline.
The Ryanair-Flybe deal would see Ryanair transfer at least 43 European routes, nine Airbus A320 aircraft and an undisclosed number of flight crew, engineers, management and facilities to operate the business. Ryanair will also provide Flybe with €100m (£85.8m) in cash along with forward sales cash and liabilities worth around €50m. With this deal, Flybe is seeking to minimise its heavy dependency on the UK revenue. Flybe is a low-cost regional airline group operating over 180 routes to 65 European airports.
Flybe’s chief executive Jim French, however, was cautious as he reminded the the clause for the deal acceptance, saying, “Before Flybe Ireland can come into being there are many hurdles to overcome, not least the EC accepting the remedies offered by Ryanair in its offer to take over Aer Lingus, and then the shareholders of Aer Lingus accepting an offer from Ryanair.”
Ryanair’s Michael O’Leary can only hope that the concessions package put forth by his carrier company before the European Commission (EC), will get him Aer Lingus, in his third attempt at acquiring the Irish carrier. The Ryanair-Flybe deal is to assure the EC over the competition problems which the commission had cited for rejecting Ryanair’s bid. With the Ryanair-Flybe deal, Ryanair is hopeful of retaining competition in air transport to and from Ireland, placing it at a favoured spot to gain approval from EC for the Ryanair-Aer Lingus takeover deal.