Flybe plans fast Connect transition, with BA brand disappearing early next year, once take-over completed

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This story is sourced from Flight International
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The BA Connect brand will disappear early next year, once Flybe completes the acquisition of British Airways' (BA) regional arm, announced last week. The new owners plan to rapidly phase out the BA Connect fleet and replace the aircraft with Bombardier Q400s and Embraer 195s through firming up options.

The deal, which does not cover BA Connect services from London City airport and between Manchester and New York, will see BA take a 15% stake in Exeter-based Flybe. BA envisages selling its 15% stake when Flybe moves ahead with an initial public offering (IPO), which is now planned between early 2008 and 2009.

"We will provisionally acquire the company by the end of December and our plan is to be completely Flybe branded by March 2007," says Flybe chief commercial officer Mike Rutter. "We have identified a potential £30 million [$57.2 million] in synergies because of duplication in the two organisations."

 

Once the deal is completed, Flybe claims it will become the largest regional airline in Europe, generating more than £600 million in revenues and carrying nearly 10 million passengers - double the 5 million it carries at present.

Flybe operates 40 BAe 146s (pictured above), Boeing 737-300, Q400 and E-195 aircraft, but plans to build this to about 82 aircraft by around 2009.

BA Connect's fleet comprises nine Avro RJ100s, four BAe 146s, eight Q300s and 28 Embraer ERJ-145s, according to Flight's Acas database. The RJ100s will be retained by BA for its London City operations.

"We are going to realise all of our options with Embraer and with Bombardier," says Rutter, adding that after firming the options, Flybe will have up to 66 Q400s and 26 E-195s.

"We want to get rid of all of BA Connect's current fleet by spring 2009, but we want all of their pilots and all of their engineers," he says.

"We will operate in partnership with BA during the transition, but at some stage we will be a completely separate Flybe operation."

Post-acquisition, the new route network will be 70% domestic UK, 20% European business and 10% leisure destinations. Flybe will take over what Rutter describes as "warm" BA Connect routes, several of which it has previously competed on.

BA Connect recorded an operating loss of £6 million in the first half of this year, representing a continuing deterioration against its business plan.

After firming options, Flybe aims to have up to 66 Q400s in its fleet.

Blog:
Read Kieran Daly's profile on the transformation of FlyBe from Jersey European Airlines serving the Channel Islands to the company set to take over British Airways' regional services