Surprise plans have emerged to revive Flybe three months after the airline collapsed.

A senior advisor to US investor Cyprus Capital has revealed that the UK regional carrier could fly again and re-employ thousands of staff who lost their jobs.

Cyrus Capital was an investor alongside Virgin Atlantic and Southend airport owner Stobart Group in the Connect Airways consortium which took over the loss-making carrier last year.

It had planned to rebrand Europe’s largest regional airline this year as Virgin Connect in a strategy to concentrate on feeding Virgin Atlantic’s hubs at Heathrow and Manchester.

But Flybe, which handled eight million passengers a year with a fleet of 70 aircraft, was hit hard by a winter travel slump as a result of the onset of the Covid-19 pandemic.

The carrier collapsed in March after failing to gain government rescue support.

EY, appointed administrator in March after the collapse of Flybe, was reported to have received about 20 non-binding offers, including for the majority of the remaining business.

However, EY said that global travel restrictions meant that the timeframe to complete any sale was challenging and, coupled with the uncertainty over the future of the airline industry, had resulted in “capital constraints, eroding valuations and diminished bidder appetite”.

Cyrus Capital advisor Jonathan Peachey, who played a key role in creating Connect Airways to acquire Flybe, has now raised hopes that the airline could return to service.

“It’s definitely not the case that we have abandoned Flybe,” he told a newspaper in Australia this week.

Peachey, who has been a director of Flybe since February 2019 and has been closely involved with the airline since the Connect takeover, said: “I’m hopeful the administration process will enable the business to re-emerge from administration.”

Cyrus was still a “key stakeholder in the administration process,” The Australian reported.

Peachey, a former board member of Virgin America, said: “We invested as part of a consortium with three shareholders. The shareholders committed over £100 million to the business.

“We invested everything that we had committed to invest and an additional sum in the months prior to the business going into administration as a result of the impact of Covid-19.

“We are in regular contact with the administrator and we are doing everything we can to ensure that the business can emerge in some form from administration.

“There’s still a demand for regional connectivity in the UK.

“Cyrus is doing everything it can, along with the other consortium members, to ensure that a business emerges that can re-hire the many thousands of employees who were dependent on it.”

He was quoted against the backdrop of Cyrus being one of two suitors to buy Virgin Australia out of administration following the airline’s failure in April.   

Peachey rejected suggestions that Cyrus’s handling of the Flybe takeover raised questions about what could happen if it took over Virgin Australia.

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