Flybe ‘would not inherit pension hole’

If Ryanair’s takeover of Aer Lingus goes ahead the low-cost airline will bear the cost of Aer Lingus’s €748m pension deficit, creating a clean sheet for Flybe Ireland.

The CEO of Flybe, Jim French, told the Irish Examiner that if the takeover goes ahead and Ryanair help creates a new airline, Flybe Ireland, the pension hole will be borne by Ryanair.

“All of the pension liabilities will remain with Ryanair,” said Mr French.

An essential part of the deal that made it so attractive to Flybe is that the new airline would be well capitalised and debt free.

The new airline would receive €100m and nine aircraft from Ryanair and commit to operating 43 routes for at least three years.

Mr French said that as part of the deal Ryanair will guarantee that there is at least a €20m profit, and if it falls short of this mark Ryanair will have to compensate Flybe by adding to the €100m fund that the airline has already received.

Flybe Ireland’s plan is to use its fleet of jets to increase the frequency of flights on the existing routes. The logic behind this is that it will provide greater flexibility for business travellers.

Flybe Ireland will not be able to offer lower cost flights than Ryanair: the carrier said that it will aim to be competitive but not a low-cost airline.

An area where Mr French believes he could grow the proposed new airline would be to develop Ireland as a westward hub.

“Flybe Ireland will increase the frequency of flights from the British regions to Dublin to use the airport as a long-haul hub. There is an enormous opportunity to develop a westward market through Dublin. Pre-clearance to the US in Dublin gives it positive potential to develop the business,” he said.

Responding to criticism by Aer Lingus CEO Christoph Müller that Flybe was a mere tool in Ryanair’s plans to carve up Aer Lingus, Mr French said that his airline had no debt or pension liabilities. Mr French said that the company had paid off €22m in loans since it was established, whereas Aer Lingus had received money from the State and had €748m in pension liabilities.

“If you are going to compare the airlines, let’s compare like with like,” said Mr French.

Picture: Christoph Müller: Claimed Flybe is a tool in Ryanair’s ‘carve-up’ plans

© Irish Examiner Ltd. All rights reserved

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