European Commission formally approves Connect Airways acquisition of Flybe, Stobart Air and Propius
Connect Airways must give up slots at Amsterdam and Paris CDG
Mark Anderson to formally assume role as CEO of the new business
Connect Airways Limited (“Connect Airways”) has received merger control clearance from the European Commission for its acquisition of Flybe Limited (“Flybe”), Propius Holdings Ltd (“Propius”), and its investment in Stobart Air Unlimited Company (“Stobart Air”), securing Flybe’s long-term future and providing more choice for customers across the UK.
The Commission investigated the impact of the proposed transaction on the market for air transport of passengers on routes from British airports to other European airports as well as some intra-UK routes. The Commission’s investigation found that the transaction, as initially notified, would have led to quasi-monopolies on two direct European routes, namely Birmingham – Amsterdam and Birmingham – Paris. The Commission also noted that entry of competitors into these routes would be difficult, considering that both Amsterdam Schiphol and Paris Charles de Gaulle airports are very congested airports. To address the competition concerns identified by the Commission with regard to the two routes, Connect Airways offered a set of commitments. Connect Airways committed to the release of five daily slot pairs at Amsterdam Schiphol airport and three daily slot pairs at Paris Charles de Gaulle airport. Under the proposed commitments, these slots will be released to competing airlines that want to fly the Birmingham – Amsterdam and Birmingham – Paris routes. These commitments fully address the competition concerns identified by the Commission regarding Connect Airways’ acquisition of Flybe. The Commission, therefore, concluded that the proposed transaction, as modified by the final commitments, would no longer raise competition concerns. This decision is conditional upon full compliance with the commitments.
With Connect Airways taking over full management control of the business, Mark Anderson (CEO, Connect Airways) and with the leadership teams from Flybe and Stobart Air will now focus on plans to grow Flybe’s regional network, as well as expanding Stobart Air’s successful franchise business.
Connect Airways will offer significant benefits for customers:
- A foundation to secure Flybe’s long-term future, building on the strong financial backing and expertise of Virgin Atlantic, Stobart Group and Cyrus
- More choice for customers through improved connectivity between UK regional airports and Virgin Atlantic’s extensive long-haul network, particularly at London Heathrow and Manchester Airports
- Enhanced customer experience in line with the Virgin brand, which Connect Airways will use in due course
- A leading franchise-flying business, via its investment in Stobart Air’s market-leading proposition
Work is also underway to develop an exciting new brand and customer proposition, which will be announced in due course.
Comment from Lucien Farrell, Chairman, Connect Airways:
“Today is an important day as Connect Airways takes full control of Flybe, bringing the team together with Stobart Air. Under Mark’s leadership, the company has the opportunity to create a world-class offering for customers, combining a highly successful franchise flying business with Europe’s largest regional airline. I wish Mark and the team every success.”
Comment from Shai Weiss, CEO, Virgin Atlantic:
“Mark and his team at Connect Airways have an amazing opportunity ahead of them. At Virgin Atlantic, we recognise the value of great partnerships, and the network and connectivity benefits they offer customers. I’m excited to build on the successful partnership Virgin Atlantic has enjoyed with Flybe – and how we can enhance the experience for our mutual customers, once Connect Airways joins the Virgin family and operates under its new brand.”
Comment from Warwick Brady, CEO, Stobart Group:
“We are building a talented team capable of establishing a well-structured, profitable airline. From today, that team are building an exciting future based on a low-cost customer-centric regional connectivity strategy. I am excited for the future of this business.”
Comment from Mark Anderson, CEO, Connect Airways:
“On behalf of Connect Airways, I couldn’t be more excited by the opportunity we have to build a strong platform in the UK and to grow our franchise flying operation in Ireland. Our whole team is focused on redefining the experience for our customers, as we rediscover the excitement and passion of being Europe’s largest regional airline.”