MIAMI – The UK Civil Aviation Authority’s (CAA) Competition and Markets Group (CMG) revoked discount carrier Flybe’s operating license (OL). This ruling, effective June 3, 2021, stops the carrier’s new owner, Flybe Limited, formerly named Thyme Opco, from regaining access to a number of London Heathrow (LHR) slots owned by Flybe.

According to, after Flybe’s financial collapse in the fall of 2020, it was acquired by Thyme Opco/Flybe Limited. That company is affiliated with hedge fund manager Lucien Farrell of Cyrus Capital. The acquisition transferred Flybe’s business assets to the new owner.

Those assets included seven pairs of LHR slots owned by Flybe and valued at US$74m (£52m) each before the pandemic. Today the slots are valued at US$14m (£10m).

The LHR slots were disputed by the newly-created Flybe Ltd and International Airlines Group (IAG), the giant Anglo-Spanish group that owns British Airways (BA). The fight was over who owned landing permissions at Europe’s busiest airport. However, IAG appropriated the slots when the original Flybe went into administration in March 2020.

Flybe’s joint administrators at global business consultancy EY challenged the IAG appropriation. Then, in August 2020, just before the conclusion of the UK’s Brexit transition period, the EU awarded Flybe “grandfathering rights,” which allow an airline to keep a slot indefinitely if it is used 80% of the time.

Flybe G-FBEJ Embraer E195 (Yorkshire livery). Photo: Alberto Cucini/Airways

The Original Issue

The original Flybe received the slots as part of a UK measure to increase competition and prevent British Airways (BA) from consolidating the market. After Flybe’s collapse, the slots were returned to BA. But Flybe would still have the right to access them if it had an operating license after June 3, 2021, under the aforementioned “grandfathering rights.”

Revoking Flybe’s license now prevents the transfer of those assets to Flybe Limited. Flybe Limited holds a separate, valid, and active operating license. But that does not entitle it to ownership of the slots that were given to Flybe as remedy measures.

This decision was subject to an appeal by Flybe Limited, but the UK’s Secretary of Transport, Rt Hon Grant Shapps MP, concluded on June 2 that each ground of appeal lacked merit and therefore upheld the decision to revoke Flybe’s OL, taking effect from the date of this decision in accordance with regulation 8(3) of the UK Regulations. “As a consequence, and in accordance with section 69A(5) of the Civil Aviation Act 1982, its route licenses cease to be in force.”

Flybe G-FBJA Embraer E175. Alberto Cucini/Airways

Why was Flybe’s OL Revoked by the CAA?

The CAA’s CMG appeals decision document states the following reasons for upholding its decision, reproduced here ad verbatim:

“The CMG proposed that Flybe’s OL be revoked because it considered that the company (i) could not meet its actual and potential obligations for a 12-month period, and so did not meet the financial viability test in Article 9 (1) of the Retained Regulation and (ii) had no realistic prospect of a satisfactory financial reconstruction within the following 12 months, so did not satisfy the criteria in Article 9 (1a) (nor the criteria for the granting of a temporary OL); and (b) the reason why the CMG took this view was, in essence, because Flybe had been in administration since March 2020 and there was no credible proposal to bring it out of administration to resume operations.”

Flybe Limited received less valuable slots at Manchester (MAN) and Birmingham (BIR) airports.

Featured image: Flybe G-PRPD Bombardier Dash 8-Q402. Photo: Roland Rimoczi/Airways