Former Stobart boss Andrew Tinkler makes capital injection offer for ailing airline Flybe

Former Stobart chief executive Andrew Tinkler has made a capital injection offer for ailing airline Flybe as it prepares to complete a proposed sale to a group led by Virgin Atlantic.

The Flybe board today confirmed it had received a "very preliminary, short and highly conditional outline contingency proposal" from Tinkler, who was fired from the Stobart board last summer amid a row with incumbent chairman Iain Ferguson.

Flybe said the proposal "envisages a capital injection and replacement of the funding provided by Connect Airways", the Virgin-led group which offered to provide a £20m liquidity injection to keep the carrier afloat last month. It will also make up to £80m available in further funding.

Flybe said Connect Airways had provided the first £15m of the £20m credit facility it announced in January.

"Flybe confirms that its advisers have held an initial discussion with Mr Tinkler’s advisers in relation to the preliminary proposal and that no formal proposal was made," it said. "For the avoidance of doubt, the preliminary proposal does not contemplate an offer for the whole of Flybe or any other acquisition structure."

Flybe said the capital injection proposed by Tinkler would only be provided if the the airline's sale to Connect Airways did not go through.

It continued: "The board does not consider that the preliminary proposal offers the certainty required to secure the future of Flybe. Accordingly, the board emphasises to shareholders that it continues to regard the arrangements entered into with Connect Airways as being the only viable option available to the company which provides the security that the business needs to continue to trade successfully. The arrangements with Connect Airways preserve the interests of Flybe’s stakeholders, customers, employees, partners and pension members."

Tinkler said: “We look to the board to continue engaging positively with regard to our outline proposal, for the benefit of all shareholders.”

Last month Tinkler bought a 10 per cent stake in the British airline​, just as it was announced that the consortium, which also includes Stobart, was set to purchase the struggling airline.

Tinkler was ousted from Stobart last year, after he was accused of breaching his contract and fiduciary duty. A lengthy legal battle with his former employer remains ongoing.

Flybe announced it was seeking a sale at the end of last year after profits nosedived 54 per cent for the six months to the end of September, prompted by higher fuel prices, a weaker pound and falling customer demand.

Last month the biggest shareholder of Flybe, Hosking Partners, said it was considering legal action over the cut-price takeover of the airline, having accused the company’s directors of breaching duties to investors.

Hosking Partners owns 19 per cent of Flybe and has asked lawyers to assess its options ahead of the proposed takeover from Connect Airways.