British regional airline Flybe due to go into administration -source

By Sarah Young

 

FILE PHOTO: A Flybe plane takes off from Manchester Airport in Manchester, Britain, January 13 2020. REUTERS/Phil Noble/File Photo

 

* Airline already struggling before coronavirus hit demand

* Accounting firm EY ready to handle administration

* Planes continuing to fly for now

* Flybe failure to hurt UK govt plans for regional connectivity (Adds owner comments, company and industry background)

 

LONDON, March 4 (Reuters) - British regional airline Flybe is due to go into administration within hours, a source told Reuters on Wednesday, as the already struggling carrier failed to withstand the plunge in travel demand caused by coronavirus.

 

Accounting firm EY will be called in to handle the administration, a form of creditor protection, once Flybe’s aircraft are all back on the ground from flying later on Wednesday, said the source familiar with the situation and who spoke on condition of anonymity.

 

A representative for Flybe declined to comment on the possibility of administration or the airline’s longer-term financial situation.

 

Flybe’s failure would put 2,000 jobs at risk and cause a headache for Prime Minister Boris Johnson and his plan to boost regional transport links.

 

Flybe would be among the first airlines to go out of business since the emergence of coronavirus, which surfaced in China last year and has since claimed around 3,000 lives and sharply reduced travel demand.

 

Some major airlines have said they will need to cut costs to weather the downturn in bookings, particularly since late February when Europe’s worst outbreak emerged in Italy.

 

British Airways, easyJet, Lufthansa and United Airlines are amongst those announcing cost-saving measures.

 

Flybe was already in financial trouble before coronavirus hit.

 

The airline, which connects smaller UK cities, was rescued from near collapse in mid-January, when shareholders agreed to invest more money alongside UK government support for the airline.

 

Flybe’s current owners are Connect Airways, a consortium created by Virgin Atlantic, Stobart Group and Cyrus Capital. The group have invested 110 million pounds ($141.6 million) since buying Flybe in 2019.

 

Virgin Atlantic declined to comment on Wednesday, while Stobart and Cyrus were not immediately available.

 

UP IN THE AIR

Flybe had been pinning hopes for survival on a government loan plus a reduction in air passenger duty, a tax charged by Britain on flights, but help did not come in time, meaning that its regional routes in Britain are now at risk.

 

PM Johnson said in January that Flybe was important for Britain’s transport links and that the government would do what it could to help the carrier.

 

His government has a plan to try to boost regions of Britain beyond London. Without Flybe though, some regional airports like Exeter, Birmingham and Southampton will have much poorer connections within Britain and to Europe.

 

Flybe’s network of routes includes more than half of UK domestic flights outside London. It has 68 aircraft and carries 8 million passengers a year between 71 airports in the UK and Europe. ($1 = 0.7770 pound)

 

(Reporting by Sarah Young in London Editing by David Milliken and Matthew Lewis)

 

-- © Copyright Reuters 2020-03-05

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Sorry to see them go as I thought they were quite good for a budget airline plus they had some good flight connections to Cardiff airport.

Been wobbly for quite a while but the Virus has finished them off.   May be the first but it won't be the last World Wide for sure.

23 minutes ago, trainman34014 said:

Been wobbly for quite a while but the Virus has finished them off.   May be the first but it won't be the last World Wide for sure.

 

    The virus , will be finishing a lot more companies off .

      Hope it don't finish me off ..

 

Edited March 5, 20206 yr by elliss
spelling

Disaster for regions in UK,, someone will take over  most of the slots ,, flew Flybe many times ,, the Embraer  planes are amazing ,,,

I think there is a basic problem with the structure of the regional airline business in the UK, and I think Europe in general.

 

The regional airlines try to look like one of the big boys, and have all the bells and whistles, websites, marketing, gate agents, ramp agents etc etc. 

 

But the regional airline business runs on wafer thin margins, even smaller than that of mainline, so all that infrastructure puts additional pressure on profitability.

 

In the US that regional market is different. There are a dozen regional airlines; Skywest, Republic, Endeavor, Trans States, GoJet, I could go on and on. But nobody has heard of them.

Why? Because they operate as third party suppliers for the mainline carriers to serve secondary airports, under the banners of; United Express, American Eagle, Delta Connection, all with a little decal next to the main cabin door..'Operated by xxx'

 

That model works brilliantly, both for the regional airlines and their mainline sugar daddies who sell the regional airline product as their own.

And all those bells and whistles are paid for by the mainline airline. The regional just provides the aircraft and the crew

 

I suspect that, just as the model of Southwest spawned Ryanair, mainline European airlines will start copying the US secondary airport model utilizing third party suppliers.

Flybe: information for employees, passengers and suppliers

16 hours ago, webfact said:

 

PM Johnson said in January that Flybe was important for Britain’s transport links and that the government would do what it could to help the carrier.

And yet they are going under. 
 

 

Edited March 5, 20206 yr by Bluespunk

25 minutes ago, Bluespunk said:

And yet they are going under. 
 

 

Sad as it is I don't see why the Government should bail them out. It's the price we pay for capitalism.

 

The GMB Union has released this sobering assessment of a possible 8 regional airports that could face closure.

https://www.gmb.org.uk/news/8-region...flybe-collapse

37 minutes ago, Chelseafan said:

Sad as it is I don't see why the Government should bail them out. It's the price we pay for capitalism.

 

Makes me wonder what was behind the claim that “the government would do what it could to help the carrier”...

 

Almost as if it wasn’t meant at all...

 

Now, why does that seem so familiar a scenario?

Edited March 5, 20206 yr by Bluespunk

8 minutes ago, Bluespunk said:

Makes me wonder what was behind the claim that “the government would do what it could to help the carrier”...

 

Almost as if it wasn’t meant at all...

 

Now, why does that seem so familiar a scenario?

I suspect they mean within reason.

 

3 minutes ago, Chelseafan said:

I suspect they mean within reason.

 

Funny, I suspect something quite different. 
 

That’s life I guess. 

11 minutes ago, Bluespunk said:

Makes me wonder what was behind the claim that “the government would do what it could to help the carrier”...

 

Almost as if it wasn’t meant at all...

 

Now, why does that seem so familiar a scenario?

The government had offered some deferral of tax, a potential loan and promises to review regional air connectivity and APD levels. Passenger duty levels are thought to have been under review in the budget next week. However, it seems with the virus impact the owners decided to pull the plug early. 

 

It probably didn't help that 'yer man' Michael O'Leary of Ryanair fame threatened to sue the UK government if they gave Flybe any state aid. 

 

 

" * Planes continuing to fly for now "

 

That's good.  Beware of sudden stops.

 

1 minute ago, CG1 Blue said:

The government had offered some deferral of tax, a potential loan and promises to review regional air connectivity and APD levels. Passenger duty levels are thought to have been under review in the budget next week. However, it seems with the virus impact the owners decided to pull the plug early. 

 

It probably didn't help that 'yer man' Michael O'Leary of Ryanair fame threatened to sue the UK government if they gave Flybe any state aid. 

 

 

So not prepared to do much at all.
 

My but how mighty Ryanair must be to shake such stern ministers of resolve and good intent. 

Sad about Flybe. Great connection from Manchester UK to Helsinki.  Always reliable. Flew with them many times.

8 minutes ago, Bluespunk said:

So not prepared to do much at all.
 

My but how mighty Ryanair must be to shake such stern ministers of resolve and good intent. 

So you think that the Government should bail them out ?

2 minutes ago, Chelseafan said:

So you think that the Government should bail them out ?

I think the government should do what it says it will. 
 

Or be clear on what it means when it says it will do what it can. 
 

Be that all that is humanly possible or very little at all. 

Edited March 5, 20206 yr by Bluespunk

9 minutes ago, Bluespunk said:

So not prepared to do much at all.
 

My but how mighty Ryanair must be to shake such stern ministers of resolve and good intent. 

I suspect O'Leary's threats were the straw that broke the camel's back. What with all the others (especially the Labour Party) criticising the government for offering to help a private company.  Ironically Labour ministers are now criticising the government for not saving them. 

 

Sad story all round anyway. 

1 minute ago, CG1 Blue said:

I suspect O'Leary's threats were the straw that broke the camel's back. What with all the others (especially the Labour Party) criticising the government for offering to help a private company.  Ironically Labour ministers are now criticising the government for not saving them. 

 

Sad story all round anyway. 

It’s sad I agree. 
 

But that’s all we agree upon I think. 

Many will follow...

On 3/6/2020 at 12:03 AM, spiekerjozef said:

Many will follow...

I think there are many airlines who constantly flirt with bankruptcy, and it doesn't take much to push them over the edge.

 

But fear not. TG will always survive even if it's flying totally empty aircraft

.......Thainess don't ya know