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

More in this Section

N20 Cork to Limerick road upgrade an ‘immediate priority’

Investors should enjoy the calm before reality sets in

Macra president: Vital need to keep on top of market forces

Overseas buyers swoop for UK firms


Breaking Stories

Twitter is on a mission to help everyone understand it better

There's more Pokemon coming to Pokemon Go

Hands-on: Prisma and turning your photos into works of art

Gorilla Glass 5 hopes to end the days of cracked phone screens

Lifestyle

Showbiz news: Miranda Kerr gets engaged to Snapchat founder

Ready to sticky rock and roll with the holiday treat that spans generations

New app helps tourists to get travel wise and avoid holiday disasters

Community action will help to slow down climate change

More From The Irish Examiner