Former Flybe shareholders prepare to take legal action

Wednesday 19 August 2020

Investors in failed airline Flybe are considering legal action against its former directors, after it emerged that shares in the company plummeted to a fraction of their purchase value the moment the deal went through.

Quoting anonymous shareholders, the Mail on Sunday reported that investors believed they had been misled about the airline’s performance before it was sold to a consortium, which included Sir Richard Branson’s Virgin Atlantic, last year.

The day before the deal, Flybe shares were each worth 16.4p, valuing the company at £36m, but when it went through, shares plummeted to just 1p each, with the company worth just £2.2m.

Pictured: Flybe and Blue Islands had a franchise agreement before the former collapsed in March.

A year later, in March 2020, the airline collapsed into administration, putting many of the Channel Islands' air links at risk.

Since then, however, many routes have been taken on by Blue Islands, which has recently been bolstered by a £10m loan from Jersey's Government.

Now past investors have employed a law firm, according to the MoS, to explore the merits of a potential claim against the former directors of the airline for their alleged misconduct and mishandling of the company’s affairs. 

A senior investor to Cyrus Capital – one of the investors that took over the airline as part of the Connect Airways consortium alongside Virgin and Stobart – told an Australian newspaper in June that investors "have not abandoned Flybe" however there have been no developments since.