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EU notification of acquisition of Flybe by Virgin Atlantic, Cyrus and Stobart Group


On 20 May 2019, the European Commission published (in the Official Journal of the EU) the notice of the prior notification of a concentration between Virgin Atlantic, Cyrus Capital Partner, Stobart Group and Flybe Group.

Virgin Atlantic, Cyrus and Stobart Group aim to acquire, through Connect Airways, joint control of Flybe and its trading subsidiaries, Flybe Limited and Flybe.com Limited, for a purchase price of £2.2 million. Virgin Atlantic, Cyrus and Stobart Group will also acquire, through Connect Airways, joint control of Propius Holdings Ltd, Stobart Aviation Limited’s aircraft leasing business, as well as an interest in Stobart Aviation’s airline operating business, Stobart Air Unlimited Company.

The business activities of the undertakings concerned are described in the notice as follows:

  • for Virgin Atlantic: the ultimate holding company of international passenger airline Virgin Atlantic Airways and international tour operator Virgin Holidays. Virgin Atlantic is currently controlled by Virgin Group and Delta Air Lines. On 12 February 2019, the Commission gave unconditional clearance to the proposed joint control of Virgin Atlantic by Virgin Group, Delta Air Lines and Air France–KLM;
  • for Cyrus: an investment adviser that manages more than US$4.4 billion globally and is an investor in public and private airlines;
  • for Stobart Group: operates in aviation and infrastructure markets, including operating regional airline Stobart Air and developing London Southend Airport;
  • for Flybe: a UK regional airline that focuses on short-haul, point-to-point flights.

Both acquisitions could fall under the scope of EU merger control.

As regards air transport of passengers, the European Commission must assess whether the transaction gives rise to overlaps on direct/indirect flights (i.e. one of the companies provides a direct flight from one city to another, while the other provides a one-stop flight for the same route) and indirect/indirect flights (i.e. the companies provide one-stop flights between two cities).

The Commission must also investigate whether the companies’ combined slots at shared airports would prevent competitors from entering or expanding their presence at these airports. Control over a large portfolio of slots at congested airports could result in higher barriers to entry for airlines wanting to operate at these airports, which in turn could result in higher fares for passengers.

If the acquisition leads to a dominant position on specific routes, commitments such as releasing slots may be offered by the notifying parties.

Currently, Flybe operates around 200 routes between 80 UK and European cities (including 19 French airports), with a dominant position in Aberdeen, Belfast City, Birmingham, Cardiff, Exeter, Isle of Man, Jersey and Southampton, while Virgin Atlantic does not have a strong share of domestic passengers given its main focus on long-haul operations.

Interested third parties (competitors, airports, etc.) are invited by the European Commission to submit their observations within 10 days of the date of publication.


Portrait ofAnnabelle Lepièce
Annabelle Lepièce