Ryanair and Flybe announce plans for new Irish airline

A new Irish carrier will be created if Ryanair wins its bid for Aer Lingus.

A new Irish carrier will be created if Ryanair wins its bid for Aer Lingus.

British airline Flybe said it has agreed with Ryanair to establish Flybe Ireland in the event the Aer Lingus deal goes through.

Ryanair would 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 move is part of an effort to maintain competition in Ireland, which is currently dominated by Ryanair and Aer Lingus.

Ryanair is working to win approval from the European Commission to buy Aer Lingus but the low-cost carrier has been told it needs to make concessions to ensure Irish air travel remains competitive.

If the deal is approved, Ryanair will provide Flybe Ireland with a cash injection of €100m and forward sales cash and liabilities worth around €50m.

Flybe will pay Ryanair €1m for the newly created airline in order to break into the Irish market and reduce its reliance on revenues from Britain.

"Flybe would be delighted to be granted the opportunity to service the Irish aviation market through Flybe Ireland, an airline which would be based in Ireland and dedicated to developing a broad range of scheduled services for business and leisure markets," Flybe's Chairman and Chief Executive Officer, Jim French, said.

"This development of creating a Dublin based airline is in line with the company's stated strategy at the time of [initial public offering] - which was to diversify away from reliance upon the UK economy.

"Flybe would be proud to have the chance to serve the Irish markets, and would be, as we seek to be throughout the rest of Europe, a good employer and corporate citizen."

He confessed there were "many hurdles to overcome" including regulatory and shareholder approvals before the launch of Flybe Ireland.

However, he believes Flybe has positioned itself well to support the creation of the new airline.

Flybe's shares jumped 12.85% to 50.50p at 9:54 while Ryanair rose 1.43% to €5.60.

RD

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