Flybe shares head skyward as it braces for bidding war
Flybe shares soared over 23 per cent in trading this morning on reports it has landed at the centre of bidding war between industry rivals Sir Richard Branson and Willie Walsh.
Walsh’s International Airlines Group (IAG) is in hot competition with Branson’s Virgin Atlantic, according to reports over the weekend which have sent the budget airline’s stock price to over 20p, its highest price in a month.
They remain well below where they stood in the middle of last month, before Flybe announced issued a profit warning that wiped £20m from its market capitalisation, and have dropped substantially since the start of the year.
The Exeter-based airline’s shares already climbed by around 70 per cent on Friday after Sky News first reported VIrgin Atlantic’s interest, meaning its value has doubled since Thursday.
Virgin Atlantic has said it is looking at a number of options including closer commercial ties or an outright purchase of Flybe. IAG has declined to comment, while rival budget airline EasyJet – tipped as another possible buyer – has dismissed reports it is currently considering a bid.
IAG is expected to be the front-runner if it ends up going head-to-head with Virgin Atlantic.
Flybe has been exploring a number of cost-saving measures as it looks to battle against lower demand, rising fuel costs and currency headwinds, and tries to recover from a highly-expensive overhaul of its computer systems.
The airline manages 78 planes, which fly from a range of locations across the UK to locations within Europe, and serves around eight million customers a year.