Flyglobespan looking for merger of acquisition
08.04.08
Edinburgh based airline Flyglobespan is seeking a merger or acquisition to fuel further growth, its new chief executive told the Scotsman. Rick Green, the new head of parent company Globespan, said that the firm remains focused on expansion despite its impending first full-year loss, caused partly by major problems with hired-in aircraft used last year.
In his first interview since joining the travel company in December, Mr Green told the newspaper he was taking over operational command from chairman and former managing director Tom Dalrymple, who has run the business for 34 years.
He said: ‘My role is to review any opportunities that exist. We are looking for a strategic partnership, such as a merger or acquisition. We are not for sale, but every business has a price.’ However, Mr Green said there was ‘absolutely no truth’ in rumours of interest from bmi.
He told the newspaper that Mr Dalrymple, 62, would become ‘more strategic, less operational,’ adding: ‘Tom is the principal shareholder and will remain so, but I think his wife would like to see more of him.’
Mr Green said that he will be looking for a less turbulent first summer at the airline than the chaos caused last year by two problematic aircraft hired from Icelandair, which he said had cost the firm more than £10m. Repeated faults with the Boeing 757s left some transatlantic passengers stranded for a week and many others with disrupted journeys.
This will contribute to the company filing its first annual loss this month, for the year to last October, despite turnover rising 40% to about £280 million. The previous year's pre-tax profits were £4.7m. Mr Green said the firm had learned its lesson, and it now operated all of its own aircraft. It has a 17-strong fleet.
Flyglobespan hit further bad publicity last October, when it became the first British airline to have a licence for flying directly across the Atlantic suspended following investigations by aviation safety authorities. The licence was subsequently restored, but the airline voluntarily surrendered it this year pending a reorganisation of its engineering division under new director Chris Hubbard, who joined from Thomas Cook.
Mr Green told the Scotsman that he is confident the licence will be restored by next month. In the meantime, twin-engine planes have to fly closer to land. He was also bullish about this year's prospects. He said bookings were up 10% on last summer, despite the credit crunch, rising oil prices and increased competition, especially from Ryanair's expansion at Edinburgh Airport.
The winter season had been the firm's strongest yet, he said, with aircraft flying 82% full – 4 percentage points up on last winter – despite a 6% increase in seats. He said: ‘Competition does not seem to be affecting us. We have regrouped and are stronger than ever.’
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