Flybe, Europe’s biggest regional airline, has been sold for what amounts to a packet of Toffos and some small change to Sir Richard Branson and his pals after a quick whip round. 

The troubled carrier was publicly put under the auctioneer’s hammer last year, and the shares flew off their 10p floor when it emerged that Sir Richard’s Virgin Group was interested in buying the thing, soaring to 16p. 

With big institutional investors heading for the exit, I understand quite a few retail investors took a punt on the stock in the hope of getting a business class deal. What they’ve been offered isn’t even cattle class. 

Investing in airlines is a fantastic way to make a small fortune from a large one, but the destruction of value this company has been responsible for is quite something, even by the industry’s fairly dismal standards. 

Flybe floated at 295p a share in 2010, and was soon comfortably above 300p before it started skidding like a plane on an icy runway. It never recovered. 

The consortium put together to buy the firm also includes Stobart Group, another rumoured bidder when the airline was put up for sale, and a private equity firm that has close ties to Virgin having worked with it in the US. 

They’re actually paying a lot more than £2.2m because their consortium is assuming £100m of debt. They’re also promising to put substantial investment into the business. 

They’re doing that because the Flybe deal could turn into a win for them. Virgin gets a feeder airline for its long haul destinations. Meanwhile, Stobart is injecting Stobart Air into it, which gets the thing off its balance sheet and means it can focus its attention on building up its ‘London’ Southend airport, a much less volatile business. The private equity firm sees a starry return if the enterprise can be fixed. 

It’s also worth saying that the deal is a win for employees. While there will be some job losses through merging Stobart Air’s back office with Flybe’s, I’m told the impact on the latter’s 2,400 staff will be limited. And the pension scheme is protected, which will have regulators breathing a sigh of relief. 

Lastly its a result for the industry – and for the Government, which must have been shivering at the prospect of another messy collapse like Monarch Air adding to the other, largely self-created, problems it is grappling with right now (the main one of which – Brexit – helped tip FlyBe over the edge). 

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The only fly in the ointment is that this apparently win-win deal still requires the approval of the only big losers: Flybe’s furious investors. 

They face a Hobson’s choice of either taking the consortium’s chump change or potentially getting nothing at all if they say no and the airline falls into administration. 

The thing is, there’s so little on the table for them, and they will have lost so much, that they might very well be inclined to throw a spanner into the works just for the hell of it. 

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