Flybe, the largest airline by passenger volume at Birmingham Airport, confirmed it is in talks with Virgin Atlantic about a potential takeover bid. Earlier this week Flybe announced it was considering a sale of their business. The Virgin news sent Flybe’s shares soaring this morning.
The asset Virgin must be looking at would be feed and distribution traffic and, of course, Heathrow and London City slots. Flybe’s capital value now is ~£21m or $27m at today’s rate. Hardly a large sum for a working airline. Moreover, it’s not just Virgin one should be looking at. The money behind Virgin these days is Delta Air Lines
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The combination of benefits Virgin and Delta could garner from acquiring Flybe is significant – we would think worth a lot more than $27m. Consider that $27m is about what Delta paid for one A220. Flybe has a fleet of 78 aircraft. The company’s previous annual balance sheet shows over £600m in assets. In the September 2018 half-year financials, the company reported £118.6m in net assets. A £286.8m net book value of aircraft represents owned aircraft, engines, aircraft modifications and capitalized maintenance assets. It would appear the company can be bought for a song, so to speak.
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