Flybe sells London Gatwick slots, defers E-175s

Flybe has decided to pull its services from London Gatwick Airport (LGW) and has sold its slots there to easyJet, already the largest operator at LGW.
Flybe said it needed to generate sufficient cash to fund a transition in its operations without recourse to shareholders. The main initiative to achieve that was chosen to be divestiture of the Gatwick slot portfolio.
Part of the airline’s reasoning was a feeling that Gatwick Airport is determined to maximise revenues from its single runway airport by increasing prices for regional/smaller aircraft. Gatwick’s charges to Flybe have increased by more than 100% in the past five years, according to the carrier.
Flybe noted that the CAA will not interfere and the UK’s coalition government has no aviation policy to protect regional connectivity. Therefore, it concluded that the Gatwick route network had become unsustainable and that withdrawal from LGW in a timely manner would be the best option.
A contract for Flybe’s LGW slots was duly signed with easyJet on 22 May for a total consideration £20.0 million. Completion of the deal is subject to shareholder approval, which is expected in July 2013 and Flybe will continue its operations at Gatwick to 29 March 2014.
Money has also been raised by the sale of two Bombardier Q400s, with the sale process ongoing for the company’s two remaining owned Q400s.
Expenditures have been cut by an agreement with Embraer to defer 16 E-175 deliveries scheduled for 2014 and 2015 until between 2017 and 2019. There will be four E-175s delivered in autumn 2013 then no further committed deliveries until 2016.

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