Virgin Atlantic and Stobart Group will buy the struggling regional airline Flybe. They’ll then partner with Cyrus Capital to start a new airline called Connect Airways, which will house Flybe, Stobart Air and aircraft leasing company Propius.

Flybe put itself up for sale last year. With the purchase, Flybe will be rebrand over time as Virgin Atlantic.

The deal involves a $22 million bridge loan to support Flybe’s working capital and operations. The buyers are also adding up to $91 million to invest in the new company’s business and support growth.

The group claims the purchase will allow it to offer more benefits to customers, including more choices linking the United Kingdom and Ireland to Virgin Atlantic’s long-haul network.

“Flybe plays a vital role in the UK’s transport infrastructure with a UK regional network which uniquely positions it to benefit from growing demands from long haul carriers for passenger feeder traffic. We have successfully implemented a clear strategy in recent years focused on tighter fleet management, improving revenue per seat and increasing load factors. The pursuit of operational excellence has reduced maintenance times and increased efficiencies and customer satisfaction,” said Christine Ourmieres-Widener, CEO, Flybe.

“However, the industry is suffering from higher fuel costs, currency fluctuations and significant uncertainties presented by Brexit. We have been affected by all of these factors which has put pressure on short-term financial performance. At the same time, Flybe suffered from a number of legacy issues that are being addressed but are still adversely affecting cashflows.

“By combining to form a larger, stronger, group, we will be better placed to withstand these pressures. We aim to provide an even better service to our customers and secure the future for our people.”