business

ALEX BRUMMER: Virgin dives to Flybe's salvation.

When it comes to airlines, Sir Richard Branson and his team have made a good impression.

So there is reason for Flybe passengers to be relieved that the Exeter-based courier has ended up in relatively safe hands.

Investors who have seen the shares plummet from 140p four years ago to 40p a year ago and a buyout price of just one cent per share will feel hurt.

But with the carrier owed to the turbines, it was a case of rescue or administration.

There is reason for Flybe passengers to be relieved that the Exeter-based courier has ended up in relatively safe hands in the form of Richard Branson's Virgin

The Unite trade union is rightly concerned about the job security for Flybe members and there is a reason, as with most companies, to bring about more employee involvement at all levels.

But in this case, the staff must be satisfied that they are still in the air.

Flybe has a credible business model with flights from smaller airports such as Southend and Southampton.

From the point of view of the consumer it can be a more pleasant experience than a crowded Gatwick and uncivilized Luton.

Branson and his management team have a surprisingly good record of establishing regional airlines.

Virgin Blue, which began with a single discount flight from Brisbane to Sydney, is now the second largest airline in Australia after Qantas.

It has been renamed Virgin Australia and is linked to the broader services of Virgin Atlantic. In the US, Virgin America started as a West Coast airline operating from San Francisco, was bought out by Alaska Airlines and renamed to Virgin Alaska.

It connects to Virgin Atlantic, where Delta is a 49 percent holder.

The trick for Branson and his team is to make the brand successful enough for him to resell, but to keep an income stream from licensing the Virgin name.

A previous bet from Virgin on the British home market failed. But Flybe, with 9.5 million passengers a year at secondary airports, has a better chance of survival.

The costs of the current investment must be shared with the volatile owner of Southend Airport, Stobart and venture capital outfit Cyrus.

The big chance is & # 39; code sharing & # 39; by weaving Flybe & # 39; s domestic British and European routes to the wider hubs and spokes of the Virgin Atlantic, Delta and Singapore.

It is unfortunate that Flybe & # 39; s CEO Christine Ourmieres-Widener felt the need to blame the Brexit for the misery of the airline.

We know from the problems of other airlines, including Great Britain, Air Berlin and Lauda, ​​that the real enemy of smaller airlines is the pricing power of Ryanair and EasyJet without frills, fluctuating fuel costs and currency turbulence.

The rebirth of Flybe as Connect, with perhaps some Virgin shine, looks promising.

Greedy gurus

Not so long ago, fund managers were technical back-stock pickers instead of stars with huge wages and bonuses. Investment gurus Neil Woodford and Terry Smith fall into another category.

They are both entrepreneurs and fund managers who risk their own capital when setting up independently.

In addition, they must be well rewarded. It would be difficult for someone to argue with Fundsmith, founded by Smith. His analytical skills are countless and he has traditionally leaned against conventional wisdom.

He has brought that clarity into Fundsmith's strategies. Those investors who chose to follow him from the start have seen an astonishing profit of 269.6 percent. But his decision to take up to £ 62 million of the company in wages and dividends is predatory.

Woodford is equally disturbing. He contributed to his funds Woodford Equity Income and Woodford Patient Capital a great reputation of previous employment at Invesco Perpetual, and is carefully listened to in the city.

But his funds are floundering, making investors (including this writer) losers. One accepts that if you put your money into something that & # 39; Patient & # 39; is mentioned, there will be no immediate return.

But that rule should also apply to the big man and his partners who have raised £ 37 million. That is unacceptable.

Great escape

Mike Ashley may have accidentally done Sir Ian Cheshire by helping him to drop off as chairman of Debenhams.

It removes the former Kingfisher boss from the danger of a smeared reputation when the looting owner of Sports Direct founds the mischief.

More significantly, it will calm the nerves of the Bank of England, which Cheshire has approved as President of the Barclays Secrecy Bank provided he pitched in some of his other jobs. Very neat.

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