Future of Europe’s Largest Regional Airline Flybe in Jeopardy

After years of uncertainty surrounding the future of regional carrier Flybe, the end of 2019 was supposed to bring closure to what had been a turbulent decade. The airline is moving into the new year with a new owner as well as a new name, or so it seems.

It was in February 2019 that saw Flybe escape years of turbulence after being bought by Connect Airways, a consortium made up of Virgin Atlantic, Stobart Aviation and financial firm Cyrus Capital, for £2.8 million. Upon completion of the deal, the airline would receive £10 million in funding to support the business, with the intention of another £80 million to become available later on.

Since the takeover, Flybe has continued to operate under its original name with a fleet of 67 aircraft including De Havilland Dash 8s and Embraer 175/195s. However, in October of last year, it was announced that the company will be rebranded as “Virgin Connect” at some point in 2020.

This week’s news that the airline is having to hold funding discussions involving the U.K. government has come as a complete surprise to many who thought the chapter of Flybe’s uncertainty had closed.

According to Sky News, the airline has approached the government and produced a last-minute plea to government ministers to defer a multi-million-pound air passenger duty (APD) bill that it has yet to pay. Flybe has said: “We don’t comment on rumour or speculation.”

The airline has been one of the biggest critics of APD saying it disproportionally affects its domestic customers with a £13 tax every time they depart from a U.K. airport.

This isn’t the first time a U.K. airline has approached the government for help. Last year Thomas Cook collapsed after it failed to raise enough money. The airline approached the government asking for the final £200 million required to prevent the airline from falling into administration. In 2017 a similar case occurred with Monarch Airlines which ultimately saw that airlines disappear from the skies.

In Flybe’s case, which flies 8.5 million passengers per year between 56 airports across the U.K. and Europe, discussions are taking place between the airline and ministers to avert any chance of a collapse which would put 2,000 jobs at risk.

Mark Anderson, the chief executive of Connect, told Flybe staff in an email on Monday morning: “We continue to operate as normal … I do appreciate that the headlines are disturbing but I want you to know that we are determined to everything we can to make this work.”

“What I now ask from all of us is that we all remain focused on our responsibilities and continue to work and support each other as a team to deliver what we know we can do,” Anderson added.

The U.K. pilot union, BALPA, has come out saying the government should do “whatever it takes” to save the carrier.

Brian Strutton, BALPA’s general secretary, said in a statement: “If Flybe didn’t exist, it would have to be invented. The importance of that regional connectivity cannot be overstated.”