Virgin Atlantic and Stobart Air came to the rescue of one of its partners, the UK airline Flybe, when it announced it was up for sale after months of struggling. With a 30% stake in the venture each, Virgin Atlantic and Stobart Air have purchased Flybe for £2.2 million, an offer significantly below the airlines closing market value of £36 million, and it will form a company called Connect Airways.
Flybe made the decision to sell the airline after losing millions, currently losing £7,000 per hour, prior to which a failed IT systems upgrade cost the airline millions more. CAST, an MRI scan for application code, questions whether Virgin Atlantic and Stobart Air have considered IT systems costs in the offer.
Although complex aviation IT systems can bring value, having no prior knowledge to the state of the infrastructure can lead to damaging and long-term costs. According to CAST, Virgin Atlantic and Stobart Air should gain as much insight into the state of the software before finalising the purchase, allowing them to gain knowledge of potential risks that have previously brought down larger airlines.