Flybe shares are climbing sharply after the airline confirmed it was in talks about a sale of its 25 slots at Gatwick airport.
Analysts said easyjet could be one of a number of airlines interested in the slots, which could fetch up to £20m. Flybe is 7.5p better at 59.5p, up more than 14%, although it cautioned there was no guarantee a deal would be done. Analyst Edward Stanford at Oriel Securities said a sale of the Gatwick slots could be transformational:
From Flybe's point of view, the capital raised would do much to enhance balance sheet strength. Moreover it would, we believe, eliminate a number of lossmaking routes at Gatwick. The airport charging regime at the airport is not favourable for an airline operating smaller planes.
Gatwick is a key hub for easyJet and we expect that management would be keen to defend its position at the airport and, as with British Airways and bmi at Heathrow, we think easyJet would be uniquely placed to maximise the potential of Flybe's slots given the scale of its existing operations at the airport.
Other interested airlines could include Ryanair, Norwegian Air Shuttle, with 6% share of movements at the moment, and possibly even Vueling, now owned by International Airlines Group, parent of British Airways and Iberia.
Espirito Santo kept its neutral rating on Flybe:
The group's earnings and valuation remain highly sensitive to small changes in assumptions, and today's announcement highlights the scope for additional restructuring opportunities over and above those already announced.
