Feb. 11 (Bloomberg) -- Flybe Group Plc, Europe’s biggest regional airline, said it’s not in the running to buy Air France-KLM Group’s CityJet unit.
“We looked at it,” Jim French, Exeter, England-based Flybe’s chief executive officer, said in an interview in Dublin. “It didn’t appeal to us at all so we’re not interested.”
CityJet has “tired” equipment and would require too much capital spending, French said. The unit’s operations at London City airport, which it serves from more than 20 destinations across Europe, are also being squeezed by British Airways, and it’s not clear how long feeder flights into Air France’s Paris Charle de Gaulle hub would last after a sale, he said.
Air France-KLM wants to narrow the number of bidders for CityJet to two by the end of next month after whittling down the group of suitors to six from 10, a person with knowledge of the talks said last week. Europe’s biggest airline is revamping regional operations in an effort to end years of losses, with Brit Air, Regional and Airlinair being folded into one unit.
Aer Lingus Rationale
French said that a Flybe takeover of Aer Lingus Group Plc routes following a proposed purchase of the airline by Ryanair Holdings Plc would be based around offering an alternative to Europe’s largest discount carrier rather competing on price.
The U.K. company would seek to capture more business travelers by increasing the frequency of flights from Dublin to British provincial destinations using its fleet of Embraer SA regional jets, which are smaller than Ryanair’s Boeing Co. 737-800s, the CEO said, adding that there’s also scope to develop new routes from Irish airports such as Cork.
“The dimension we want to bring into this is a new stimulus, to bring in the Embraer jets to give us greater frequency on the core routes such as Birmingham, Manchester, Edinburgh, Glasgow,” he said. “We can be sufficiently low cost to offer a competitive product at a slight premium. People will pay a small premium in order not to have the Ryanair product.”
The European Commission has given March 6 as the deadline by which it will announce if it’s willing to approve Ryanair’s bid for Aer Lingus, French said.
The side-deal with Flybe would include a 100 million-euro ($134 million) payment from the larger company.
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