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Publish Date : 07-Feb-2013

British carrier Flybe has agreed with fellow low-cost airline Ryanair to establish an Irish airline named Flybe Ireland, if Ryanair\'s bid for rival Aer Lingus is successful.

On Wednesday, Flybe said it had reached agreement with Ryanair over the potential transfer of some routes and aircraft, as part of the Irish carrier\'s efforts to gain approval for its Aer Lingus bid from the European Comission.

Brussels blocked Ryanair\'s first bid in 2007, and their second bid was unsuccessful in June last year. In its third attempt to takeover their domestic rival, Ryanair is required to make some compromises in order to preserve competition within Irish air transport.

Last year, Aer Lingus claimed that a merger between them and Ryanair would monopolize 44 routes from Ireland. To address this, Flybe would be given operation of 40 out of the 100 Aer Lingus short-haul journeys.

For the new airline, Flybe would pay Ryanair one million euros.

The deal would involve Europe\'s leading budget airline, Ryanair, transferring a minimum of nine Airbus A320 jets, 43 European routes and an unrevealed number of facilities, management, engineers and flight crew to Flybe Ireland.

Ryanair will also provide 100 million euros as cash injection and forward liabilities and sales cash worth about 50 million euros for the new airline.

Flying to 65 destinations in Europe and running more than 180 routes, Flybe wants to reduce its dependence on British revenues.

Jim French, Flybe chief executive, said the deal\'s negotiated terms would ensure that Flybe Ireland would be well-funded in order for the company to achieve their aims.

However, the new airline concept depends on many factors, including permission from the European Commission.

\"However, before Flybe Ireland can come into being there are many hurdles to overcome, not least the EC accepting the remedies offered by Ryanair in its offer to take over Aer Lingus, and then the shareholders of Aer Lingus accepting an offer from Ryanair,\" he said.

British Airways may also be set to benefit, as the Irish carrier made a conditional offer to provide most of Aer Lingus\' valuable slots at London\'s Heathrow Airport. If Ryanair can secure approval from the Irish airline\'s shareholders, they have agreed to give the UK flag carrier approximately 68 percent Aer Lingus\' slots at Heathrow.

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