Connect Airways
A consortium formed to acquire and operate the British regional airline Flybe.
Last updated August 25, 2026
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Overview
Connect Airways was a consortium established in December 2018 to acquire the British regional airline Flybe after Flybe was put up for sale following a profit warning and continuing financial pressure. The consortium brought together Virgin Atlantic, Stobart Aviation, and Cyrus Capital Partners, using the Luxembourg-based corporate vehicle DLP Holdings. Virgin Atlantic and Stobart each held 30% of the consortium, while Cyrus Capital held the remaining 40%. Cyrus had previously worked with Virgin Group on the creation and eventual sale of Virgin America. Connect Airways initially proposed a cash offer of £2.2 million for Flybe's entire share capital in January 2019. It subsequently increased the offer by £600,000 and agreed to provide immediate and additional bridge financing intended to support Flybe while the transaction proceeded. The package included £10 million to be released immediately, a further £10 million facility, and later confirmation of an additional £80 million of funding. Flybe Group accepted the improved offer. The transaction was structured around the acquisition of Flybe's operating assets, including its airline business and website, rather than the continuation of the listed parent company as an operating enterprise. The operating assets were transferred to Connect Airways on 21 February 2019, despite a late competing bid. Shareholders later approved the sale of the residual Flybe Group, which had effectively become an empty shell. European Commission merger clearance was granted in July 2019, subject to the release of slot pairs at Amsterdam Schiphol and Paris Charles de Gaulle. The consortium also acquired Stobart Air shortly before completing the Flybe transaction, while Stobart Air was expected to retain its own operating certificate and continue its franchise and wet-lease activities for other airlines. Connect Airways planned to reposition Flybe as a broader United Kingdom network carrier. The proposed customer-facing identity was Virgin Connect, with the intention of aligning Flybe more closely with the Virgin brand and increasing the group's presence at London Heathrow and Manchester. The planned rebranding was expected to preserve Flybe and Stobart Air's separate air operator certificates, rather than immediately merging their operating structures. A Virgin Connect information page and a separate Virgin Group landing page were created as preparatory steps, although the rebrand was never completed. Flybe remained under severe financial pressure. In early 2020, the UK government considered a proposed £100 million rescue loan and discussed the matter with the European Commission in relation to state-aid rules. On 5 March 2020, Flybe entered administration and stopped all flights after Connect Airways concluded that it could no longer provide further financial support. Virgin Atlantic said the consortium had invested more than £135 million and referred to the damaging effect of the emerging COVID-19 crisis on Flybe's trading, while the proposed government loan had not been granted. Connect Airways itself entered administration on 10 March 2020. In April 2020, Stobart Group bought back Stobart Air and Propius Leasing from the administrators for an initial payment of £300,000 plus deferred consideration that could reach £8.25 million. Connect Airways therefore became a short-lived acquisition and restructuring vehicle rather than a lasting airline brand.
History
Connect Airways was created in December 2018 as a consortium for the acquisition of Flybe, the British regional airline. Flybe had been placed on the market after issuing a profit warning and facing continuing commercial and financial difficulties. The consortium was formed by Virgin Atlantic, Stobart Aviation, and Cyrus Capital Partners through DLP Holdings, a Luxembourg-based vehicle. Its ownership was divided between Virgin Atlantic and Stobart, with each holding 30%, and Cyrus Capital, which held 40%. The transaction developed during January 2019. Connect Airways first offered £2.2 million for Flybe's entire share capital. On 15 January it improved the offer by £600,000 and proposed a financing package intended to maintain Flybe's liquidity. The package included £10 million of immediate funding, a further £10 million facility, and later confirmation of another £80 million. Flybe Group accepted the revised terms. The structure focused on transferring the operating assets of the airline and its website to Connect Airways. Flybe's listed parent was subsequently left without the principal operating assets, and its shares moved to a standard listing, reducing the need for shareholder approval of the asset transfer itself. On 21 February 2019, the transfer of Flybe's operating assets was completed. The transaction faced a competing bid shortly before completion, but Connect Airways prevailed. Flybe Group shareholders later approved the sale of the residual company, with the relevant corporate changes becoming effective in March. The consortium had also agreed to acquire Stobart Air, which was associated with Stobart Aviation. Stobart Air was expected to continue operating with its own air operator certificate and to preserve its franchise and wet-lease activities for other airlines. The European Commission approved the combination in July 2019, subject to competition remedies involving slot pairs at Amsterdam Schiphol and Paris Charles de Gaulle. Connect Airways then pursued a broader strategic plan. Flybe was expected to be rebranded as Virgin Connect in 2020, with a stronger connection to Virgin's brand architecture and an ambition to create a fully developed UK network carrier. The plan called for a larger presence at Heathrow and Manchester and envisaged maintaining separate operating certificates for Flybe and Stobart Air. Preparatory information was published through a Virgin Connect web page, while Virgin Group also created a separate landing page to distinguish the proposed airline identity from an unrelated Virgin Connect brand used in Russia. The plan was overtaken by Flybe's financial deterioration. In February 2020, the UK government considered a £100 million rescue loan and held discussions with the European Commission about compatibility with European state-aid rules. The loan did not materialize. In the early hours of 5 March 2020, Flybe entered administration and ceased operations. Virgin Atlantic said that Connect Airways could no longer continue funding the airline, despite the consortium's investment of more than £135 million, and identified the negative impact of the COVID-19 pandemic as an additional factor affecting Flybe's trading. Connect Airways entered administration on 10 March 2020. The group's remaining assets were subsequently dealt with by administrators. On 27 April 2020, Stobart Group bought back Stobart Air and Propius Leasing, combining an initial payment of £300,000 with deferred consideration that could total £8.25 million. The proposed Virgin Connect brand was never launched as an operating airline.
- 2020
Flybe administration
[1]Flybe entered administration and stopped flying on 5 March after further support could not be secured.
- 2020
Connect Airways administration
[1]Connect Airways entered administration on 10 March.
- 2019
Initial Flybe offer announced
[1]Connect Airways made an initial cash proposal to acquire Flybe's entire share capital.
- 2019
Improved offer and financing package
[1]The consortium increased its offer and outlined additional bridge and working-capital support for Flybe.
- 2019
Flybe operating assets acquired
[1]Connect Airways completed the transfer of Flybe's operating assets and website on 21 February.
- 2019
European merger clearance
[1]The European Commission cleared the transaction subject to airport-slot remedies.
- 2018
Consortium formed
[1]Virgin Atlantic, Stobart Aviation, and Cyrus Capital Partners established Connect Airways to pursue the acquisition of Flybe.
Products and positioning
A consortium and airline investment vehicle intended to stabilize Flybe, develop it into a larger UK network carrier, and eventually present the business under the Virgin Connect identity.
Passenger airline
Flybe regional passenger services
The principal operating business acquired by Connect Airways was Flybe, a British regional airline serving domestic and European routes. Connect Airways intended to stabilize and expand this network rather than create a wholly new airline operation. Flybe's operating assets and website were transferred to the consortium in February 2019, but the airline ceased operations before the proposed Virgin Connect rebrand could be implemented.
Planned airline brand · 2020
Virgin Connect
Virgin Connect was the planned customer-facing identity for a rebranded Flybe. The concept aimed to align the regional airline with the Virgin brand, strengthen links through Heathrow and Manchester, and support a broader UK network-carrier proposition. Preparatory web information was made available, but the brand never became an operating airline because Flybe entered administration in March 2020.
Marketing campaigns
- 2020Virgin Connect launch preparation
United Kingdom
Virgin and Connect Airways prepared public-facing information for the planned conversion of Flybe into Virgin Connect, including a preliminary website and explanatory material.
Outcome. The proposed rebrand was abandoned when Flybe ceased operations before launch.
Brand decisions
2020
Plan Virgin Connect UK network carrierStrategyBackground
Connect Airways sought to integrate Flybe more closely with Virgin's brand and develop a stronger UK network presence.
Action taken
The consortium prepared a Virgin Connect identity and planned to expand the strategic role of Heathrow and Manchester while retaining separate operating certificates.
Aftermath
The plan was not implemented because Flybe ceased operations and Connect Airways entered administration.
2020
Cease further financial support for FlybeStrategyBackground
Flybe required additional funding while trading under severe pressure, and a proposed government rescue loan was not granted.
Action taken
Connect Airways concluded that it could no longer commit further financial support, leading to Flybe entering administration.
Aftermath
Flybe stopped all operations on 5 March and Connect Airways entered administration on 10 March.
Proposed government rescue loan. (February-March 2020)
2019
Acquire Flybe operating assetsM&ABackground
Flybe was being sold after financial deterioration and a profit warning.
Action taken
Connect Airways increased its offer, arranged financing, and completed the acquisition of Flybe's operating assets and website.
Aftermath
The transaction received European Commission clearance with airport-slot remedies, but Flybe later failed and entered administration.
Acquisition offer. £2.2 million → £2.8 million (January 2019)
Recent events
- 2020
Virgin Connect rebrand preparations begin[1]
Campaign
The consortium prepared to relaunch Flybe under the Virgin Connect name as part of a planned UK network-carrier strategy.
- 2020
Flybe ceases operations and enters administration[1]
Bankruptcy · Other
Flybe stopped operating and entered administration after Connect Airways could no longer commit further financial support.
- 2020
Connect Airways enters administration[1]
Bankruptcy
The consortium entered administration five days after Flybe collapsed.
- 2020
Stobart Group buys back Stobart Air and Propius Leasing[1]
M&A
Stobart Group acquired Stobart Air and Propius Leasing from the Connect Airways administrators under a deal combining an initial payment with deferred consideration.
- 2019
Connect Airways submits initial offer for Flybe[1]
M&A
The consortium offered £2.2 million for Flybe's entire share capital, subject to the required corporate and court processes.
- 2019
Connect Airways increases Flybe offer and funding commitment[1]
M&A · Other
Connect Airways raised its offer to £2.8 million and described additional bridge financing intended to support Flybe during the transaction.
- 2019
Flybe operating assets transferred to Connect Airways[1]
M&A
The airline's operating assets and website were transferred to Connect Airways on 21 February, despite a last-minute competing bid.
- 2019
European Commission clears Connect Airways transaction with slot remedies[1]
M&A · Regulation
Merger clearance was granted subject to the release of slot pairs at Amsterdam Schiphol and Paris Charles de Gaulle.
Sources1 sources
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