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UK Regional Carrier Flybe Falls into Administration
After years of uncertainty the airline Flybe, which has been operating UK domestic and European short-haul flights, has gone into administration after 40 years of operation.
In a letter to the 2,400 airline employees, chief executive Mark Anderson said: ” Despite every effort, we now have no alternative – having failed to find a feasible solution to allow us to keep trading.”
“I am very sorry that we have not been able to secure the funding needed to continue to deliver our turnaround,” he continued.
The news of the collapse will spook many businesses, not just in the aviation industry, that has a rocky financial structure as governments around the world attempt to fend off the economical impact of the COVID-19 Coronavirus. In Flybe’s case, the drop in demand in air travel was partly to blame for the collapse.
The UK pilot union, BALPA, has commented with General Secretary Brian Strutton saying: “A year ago Flybe was taken over by new owners with promises of funding for a bright future. Six weeks ago, when the ownership consortium lost confidence the Government promised a rescue package, apparently at that time recognising the value of Flybe to the regional economy of the UK.”
“Throughout, pilots, cabin crew and ground staff have done their jobs brilliantly, while behind the scenes the owners and, sadly, Government connived to walk away. Flybe staff will feel disgusted at this betrayal and these broken promises,” the union boss said.
The airline was launched in 1979 under the name Jersey European Airways. The airline traded under various names throughout the end of the century before being rebranded Flybe in 2002. Following the purchase of BA Connect, a subsidiary of British Airways, the route network was significantly increased both in the U.K. and across Europe, making Flybe the largest regional airline in Europe.
In 2019, a takeover bid of £2.2 million was accepted by the Connect Airways Consortium, a group comprising of Virgin Atlantic and Stobart Aviation, which failed to take over the airline in 2018. With the sale completed in February 2019, it was announced that Flybe would be rebranded as Virgin Connect, with plans to fully integrate the airline into the Virgin brand at the beginning of this year.
Because of the takeover, many would have been right to assume that Flybe was in good hands and having a safe financial future under new ownership. However, this was evidently not the case, with Flybe again in difficulties and facing mounting losses despite the money received by its owners.
In mid-January, an agreement was made to defer the airline’s tax debts and an increase in funding from Connect Airways with also a promise by the U.K. government to review the Air Passenger Duty tax.
Last month, the government agreed a £100 million rescue package to keep the airline afloat, an unexpected move following the resistance by the government to help previous airlines Monarch and Thomas Cook.
The decision by the government was met with unhappiness by the bosses of Ryanair and British Airways owner International Airlines Group, with IAG boss Willie Walsh pointing out that Flybe has big owners, coincidently including BA rival Virgin Atlantic.
The closure of Flybe will have a huge knock-on effect on the airports it served, with around 90 percent of Southampton Airport’s movements were from Flybe. The headquarters of the airline was at Exeter airport, a regional airport in the southwest of the country, who will also be affected with 80 percent of airport passengers coming to fly with Flybe.
Flybe operated 36 percent of all UK domestic flights (ahead of the UK’s two largest airlines, British Airways and easyJet) and carried 26 percent of domestic passengers(behind British Airways and easyJet, which operate larger aircraft types.
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