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What The Flybe/Ryanair Plans Say About The Regional Model

Aer Lingus CEO Christoph Mueller says that Flybe’s preliminary agreement with Ryanair to set up Flybe Ireland only makes it a tool to finally get through the planned Aer Lingus takeover. While Mueller is right of course, that is only half the story.

The other half is that Flybe is about to fundamentally change its business model and that its current model apparently no longer works. Flybe has been admired for inventing the low cost regional model in Europe and it seemed to work initially. But the airline’s recent financial results tell a different story. 

Flybe is already seeking business outside its previous realm – such as taking over Finnair’s Embraer flying. The Airbus A320 operation inherited from Aer Lingus/Ryanair and nicely supported with a €100 million start-up gift would be the next step. But it inadvertently shows how far reaching Flybe’s problems really are. If the core business was okay, it would probably not have looked at such a deal. Conversely, if Flybe Ireland is really set up, none of the parent company’s original problems would be solved. It would still have to work hard to prove that it can survive in regional air transport, while not being distracted by its new Airbus operation.

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