Flybe and Ryanair agree Irish airline deal
LONDON (Reuters) - British airline Flybe has agreed with Ryanair to create an Irish carrier known as Flybe Ireland in the event of a successful bid by Ryanair for rival Aer Lingus.
Flybe said on Wednesday it has reached agreement over the possible transfer of some aircraft and routes with Ryanair as part of the Irish airline's attempts to win approval from the European Commission for its bid for domestic rival Aer Lingus.
Ryanair, Europe's leading low-cost carrier, is making its third takeover attempt of Aer Lingus and needs to make concessions that would retain competition in air transport to and from Ireland.
Flybe said it would pay Ryanair 1 million euros for the newly created airline.
The deal would see Ryanair transfer to Flybe Ireland 43 European routes, at least nine Airbus A320 aircraft and an undisclosed number of flight crew, engineers, management and facilities to operate the business.
The Irish low-cost carrier will also provide Flybe Ireland with a cash injection of 100 million euros and forward sales cash and liabilities worth around 50 million euros.
Flybe, which is a low-cost regional airline group operating over 180 routes to 65 European airports, is looking to reduce its reliance on revenues from Britain.
"The terms of the deal negotiated ensure that Flybe Ireland will be a well-capitalised, well-funded company, enabling us to deliver upon that strategic aim," said Flybe chief executive Jim French.
"However, before Flybe Ireland can come into being there are many hurdles to overcome, not least the EC accepting the remedies offered by Ryanair in its offer to take over Aer Lingus, and then the shareholders of Aer Lingus accepting an offer from Ryanair. (Reporting by Rhys Jones; editing by James Davey)