Why are major airlines scrambling to buy bankrupt Flybe?

Why are major airlines fighting to buy bankrupt Flybe?

Less than two weeks after Flybe entered administration, two major parties interested in buying the defunct airline entered the arena. Potential buyers of Air France-KLM Group and Lufthansa Group are especially eager to get their hands on Flybe's first-class airport slots.

Air France-KLM or Lufthansa < /strong>can buy Flybe

Both airline groups are in talks to buy the former regional carrier after it was taken over and all operations ceased on 28 January, according to British media. Experts do not rule out a second revival of the ill-fated British airline.

Other parties, including British Airways, the UK Civil Aviation Authority (CAA) and leasing company Nordic Aviation Capital, are also reportedly actively involved in the search for a new buyer for Flybe. Prior to its collapse, the airline operated a fleet of eight Bombardier Dash 8-Q400 aircraft.leased from Nordic Aviation Capital.

How much do good slots cost?

Flybe's seven takeoff and landing slots at London Heathrow Airport (LHR) and five pairs at Amsterdam Schiphol Airport (AMS) are a big bonus for potential buyers. Slots at busy popular airports like LHR and AMS can sell for millions. The highest amount ever paid out for a single pair of slots was £60 million. That's what Oman Air paid in LHR in 2016.

After the collapse of Thomas Cook and Monarch Airlines, a precedent was set that allowed airlines to sell time at airports as part of the administration process. However, Flybe slots cannot be sold due to some technical and contractual reasons. That is, any potential buyer needs to acquire the entire company and take on all its obligations if he wants to get his slots.

The collapse of Flybe resulted in the loss of almost 300 jobs and affected about 75,000 passengers, the airline suffered losses of approximately $ 5 million a month.

If the deal to buy Flybe does not go through, its slots will eventually be returned to the airport management and redistributed in due time to the “correct” competing airlines. Specific slots and takeoff and landing capabilities were awarded to Flybe by the regulator in 2012 after British Airways acquired rival regional carrier British Midland.

How long does it take to negotiate a deal?

And here is the most important thing. It's unclear if a potential third resurrection of Flybe will take place, or if the brand will ever make it back to the skies.

According to media reports, Flybe's current administration may only have a few days to strike a deal to avoid shutting down the airline. At the same time, it is not yet known what exactly they want to offer to the regional carrier Air France-KLM or Lufthansa.

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