Flybe, do fly, do. But reviving the UK regional airline is risky

With aviation mired in its worst ever crisis, news that Thyme Opco plans to resurrect UK regional airline Flybe in 2021 has attracted attention.

The affiliate of Cyrus Capital (which, alongside Virgin Atlantic and Stobart Group, bought Flybe in 2019) has acquired Flybe's brand, intellectual property, stock and equipment from its administrator. This does not include aircraft, but is understood to include its operating licence, subject to CAA approval, while the position on Flybe's former slots is unclear.

Meanwhile, UK capacity has fallen more heavily than in Europe overall, including its domestic market - the main focus for regional airlines. The UK regional sector is now populated by former Flybe franchisees, who are building commercial partnerships among themselves. Loganair dominates, while Eastern Airways, Blue Islands and Aurigny Air Services also have appreciable seat shares.

Flybe was the biggest airline in the domestic UK regional market, but repeated losses demonstrated a lack of focus. Reinventing it in its previous form would be a mistake, and Thyme Opco plans to start smaller.

However, other than the Flybe brand - whose value is questionable - the proposal seems to offer little advantage over a totally new-start regional airline.