What could happen if Virgin takes over Flybe

Following last weeks blog where I profiled what a British Airways (IAG) takeover of Flybe could look like I look into what a Virgin Atlantic takeover could look like. Currently this looks the more likely option, with Virgin confirming as recently as Wednesday 19^th December that talks between the two airlines were ongoing. For me this option is more exciting as it would create two strong long haul British airlines which might finally ask British Airways some questions on their Long-Haul routes from the UK, forcing them to imporve the product that they currently offer.

 

Flybe Bombardier Dash 8-Q400

A rebrand

I can’t see a reason for Virgin to keep hold of the Flybe branding. Instead I would imagine that they would instead brand Flybe as another member of the Virgin group, however what name they use will probably be the most interesting. It would not be logical for them to for them to use the Virgin Atlantic branding, as that holds no relevance for Flybe owing to the fact that they do not fly any transatlantic routes. It is also highly unlikely that Virgin would also resurrect the Little Red brand which they used in their previous atempt at the UK domestic market, as that was such a failure that the newly re-branded airline would be at such a disadvantage already that it would not aid Flybe in their issues of making money. Instead I feel that Flybe would be given a new name such as Virgin UK or something along those lines to acknowledge the size that Flybe holds in the UK domestic market as well as its place in the Virgin group. What would also be interesting is if the management at Virgin Atlantic decided to join in this rebrand after a few years to offer continuity between the two airlines and to avoid operating two differently named airlines from the same country that could end up being confusing to passengers or if they would prefer to keep the strong Virgin Atlantic brand that they have built up over their years of operation. 

Virgin Atlantic 747

A continuity in operations

Virgin would coordinate the Flybe schedules so that they could use them to feed into their long-haul flights from both Heathrow and Manchester. This would benefit Virgin primarily as it would mean that they could operate with a higher load factor on these routes, which would obviously make them more profitable. This also would benefit Flybe as it would make them the only airline feeding Virgin on the routes that they fly, giving them a competitive edge on other smaller airlines that they compete with, which could have the potential to start allowing Flybe to be profitable again. Overall this would only be positive for both airlines, and it would also allow Virgin Atlantic to compete with British airways more effectively on long-haul routes adding to their market share and also allowing them to compete with British airways feeding their long-haul routes from Scotland, which would only be positive as this reduces prices whilst also increasing levels of service. 

Flybe Bombardier Dash 8-Q400

A growth of Virgin in Manchester

One way I think Virgin could compete with British Airways most effectively would be by growing their hub from Manchester. Currently Virgin serve 4 year-round destinations from Manchester with 3 more being added in seasonally. However, I think by using Flybe’s regional network they would be able to sustain more routes. Currently from Manchester Flybe serves routes to Exeter, Isle of Man, Jersey, Knock and Southampton, none of which currently have direct flights to London Heathrow. On these routes it is 2 hours quicker to fly to Manchester from Exeter than it is to drive to Heathrow airport, 7 and a half hours quicker when coming from the Isle of Man, 5 hours quicker from Jersey, 9 hours quicker coming from Knock and 15 minutes quicker when coming from Southampton. If Virgin were able to take all of the long haul traffic from these areas, as well as Flybe potentially adding further routes in the future from airports such as Norwich, Guernsey and Cardiff then it is realistic that there would be enough traffic coming into Manchester for Virgin to add extra Long Haul routes from Manchester. This would also provide further competition to British Airways flights out of London and also would act as a viable alternative for British people across the country to flying long haul out of London

That’s all I have got for this week but be sure to check last week’s blog where I profile what could happen if British Airways takes over Flybe instead.