With equity markets worldwide on course for their best week since late November the FTSE 100 is ahead by 0.6% to 6,986.55 closing on the psychologically significant 7,000 mark.
The joint venture, dubbed Connect Airways, offers just 1p for each Flybe share.
Connect Airways pledges a £20m bridge loan facility to support Flybe's ongoing working capital and operational requirements.
The joint venture is also planning to provide up to £80m of further funding to invest in the business and support its growth.
Unsurprisingly given the massive discount to last night’s closing share price, Flybe enters a nosedive, down 75% to 4p. Stobart meanwhile is up 8.8% to 163.2p.
Online electrical retailer AO World (AO.) gains 3.6% to 128.6p as it keeps its full-year guidance unchanged. A decision to extend Black Friday deals over a long period in November was 'well received' by customers, supporting an 8.2% rise in third-quarter revenue.
'AO World remains on track to deliver its long-term strategic plan and the board's expectations for the full year remain unchanged,' the retailer confirmed.
UK revenue growth was 4.4% for the quarter, which the company attributed to offering Black Friday deals over a longer time period in November, smoother sales flow and improved margins.
The company recorded its highest sales month ever in November.
For the 23 weeks between 29 July and 5 January, the company says its sales rose 0.6% on-year, but fell 1.1% on a like-for-like basis.
Margins, meanwhile, had been hurt by heavy discounting to remain competitive. Moss Brothers said it expected to post an adjusted loss for the year through January of £0.6m, which it says is in line with current revised market consensus.
Expectations were already pitched pretty low and the shares rise 2.7% on the update to 26.9p.
Profits and adjusted earnings per share were both expected to be 5-10% below previous management expectations. The shares drop 18.9% to 90p.
Earnings before interest, tax, depreciation and amortisation for the year through March is expected to be in the region of £8.2m, on revenue of around £133m.
The revenue guidance still marks an increase from £116.4m year-on-year but undershoots current market expectations. Sales for the six-week period from 25 November to 5 January rose 8.4%. but the company engaged in deeper-than-expected discounting to clear inventory.
Pub operator Ei Group (EIG) gains 3% to 203.5p as it agrees to sell the bulk of its property portfolio to Tavern Propco for £348m. The sale of 370 properties, including public houses and other commercial properties, represents a 'significant' proportion of the current Ei Commercial Properties division, which had a portfolio of 412 properties.