FLYGLOBESPAN, Scotland's largest airline, is seeking a merger or acquisition to fuel further growth, its new chief executive has revealed.
Rick Green, head of parent company Globespan, has disclosed that the firm remains firmly 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 Edinburgh-based company in December, Green said he was taking over operational command from chairman and former managing director Tom Dalrymple, who has run the business for 34 years.
Green was formerly managing director of Glasgow-based Direct Holidays, which became part of the merged Thomas Cook-MyTravel conglomerate last year. First Choice and Thomson Holidays owner TUI also merged months later.
The signals from Green suggest Globespan may be following a similar path. He said: "My role is to strategically 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, Green said there was "absolutely no truth" in rumours of interest from BMI.
He said Dalrymple, 62, would become "more strategic, less operational." He added: "Tom is the principal shareholder and will remain so, but I think his wife would like to see more of him."
Green will be looking for a less turbulent first summer season at Globespan than the hiatus caused last year by two problematic aircraft hired from Icelandair, which he admitted had cost the firm more than £10 million. Repeated faults with the Boeing 757s left transatlantic passengers stranded and others with disrupted journeys.
This will contribute to Globespan filing its first loss this month, for the year to last October, despite turnover rising 40 per cent to about £280 million. The previous year's pre-tax profits were £4.7m. Green said the firm had learned its lesson, and it now operated all of its own aircraft. It has a 17-strong fleet.
Six-year-old Flyglobespan hit further bad publicity in 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 by the Civil Aviation Authority, but the airline has this year voluntarily surrendered the licence pending a reorganisation of its engineering division under new director Chris Hubbard, who joined from Thomas Cook.
Green is confident the licence will be restored by next month. In the meantime, twin-engine planes have to fly closer to land.
Confident that such problems will soon be history, Green was bullish about this year's prospects. He said bookings were up 10 per cent 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, Green said, with aircraft flying 82 per cent full – 4 percentage points up on last winter – despite a 6 per cent increase in seats.
He said: "Competition does not seem to be affecting us. We have regrouped and are stronger than ever."
The full article contains 524 words and appears in The Scotsman newspaper.
