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Flybe collapses two months after government announces rescue
Source: The Guardian
Flybe, Europe’s largest regional airline, has collapsed into administration less than two months after the government announced a rescue deal.
The impact of the coronavirus on flight bookings proved the last straw for the Exeter-based airline, which operates almost 40% of UK domestic flights, as the government stalled on a controversial £100m loan.
The UK Civil Aviation Authority announced early on Thursday morning that the airline had entered administration.
Read more: https://www.theguardian.com/business/2020/mar/05/flybe-collapses-two-months-after-government-announces-rescue
yikes
1 replies
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= new reply since forum marked as read
Flybe ran into financial difficulties last year and then again in January. The government has been considering intervening with a financial assistance package that includes concessions on Airport Passenger Duty and a £100 million loan to keep the airline flying but the Financial Times has reported that the government has decided against lending the operators a parachute after bookings collapsed due to the coronavirus crisis.
Last month Airport Managing Director Neil Garwood told a meeting of the Southampton Airport Consultative Committee that Flybe operated over 90% of the flights at Southampton and that the airport was over reliant on the one carrier. He argued that it was important for the runway to be extended in order to attract other carriers and ensure the long term survival of the Airport but the plans are opposed by environmental and resident action groups and have met with objections from neighbouring Southampton and Winchester City Councils who say the carbon emissions generated by increased air travel are incompatible with carbon reduction targets.The planning application to extend the Airport runway is due to heard by Eastleigh Borough Council shortly.
https://www.eastleighnews.co.uk/2020/03/all-flybe-flights-grounded/
Last month Airport Managing Director Neil Garwood told a meeting of the Southampton Airport Consultative Committee that Flybe operated over 90% of the flights at Southampton and that the airport was over reliant on the one carrier. He argued that it was important for the runway to be extended in order to attract other carriers and ensure the long term survival of the Airport but the plans are opposed by environmental and resident action groups and have met with objections from neighbouring Southampton and Winchester City Councils who say the carbon emissions generated by increased air travel are incompatible with carbon reduction targets.The planning application to extend the Airport runway is due to heard by Eastleigh Borough Council shortly.
https://www.eastleighnews.co.uk/2020/03/all-flybe-flights-grounded/
BBC analysis:
The serious push came 10 years ago when it raised money with a stock market float, and set out a plan to become Europe's biggest regional airline, flying mid-sized planes between secondary cities. The model works brilliantly in America, where regional airlines, often flying as franchises of the larger network carriers, are a large and thriving business.
It did not work - or at least Flybe did not make it work - in Europe. It retrenched, and was left in the farcical situation of paying for a fleet of Embraer aircraft that it could not fly. The remaining network was still too big, and cash resources dwindled. The airline came close to going under at the start of last year, but was bought by consortium of Virgin Atlantic, Stobart, and a financial investor Cyrus Capital.
They had conflicting objectives. Virgin was eager to preserve feed to its long-haul flights at Heathrow, and perhaps snaffle along the way some of Flybe's valuable Heathrow slots. Stobart was eager to keep flights at its main asset, Southend Airport. And Cyrus thought it might make money if the business was resuscitated.
The trio were slow to act - a rebranding to Virgin Connect never happened, and losses continued to rise. A cold shoulder from the government and a rapid drop in bookings thanks to the coronavirus sealed the airline's fate.
https://www.bbc.co.uk/news/business-51746564
It did not work - or at least Flybe did not make it work - in Europe. It retrenched, and was left in the farcical situation of paying for a fleet of Embraer aircraft that it could not fly. The remaining network was still too big, and cash resources dwindled. The airline came close to going under at the start of last year, but was bought by consortium of Virgin Atlantic, Stobart, and a financial investor Cyrus Capital.
They had conflicting objectives. Virgin was eager to preserve feed to its long-haul flights at Heathrow, and perhaps snaffle along the way some of Flybe's valuable Heathrow slots. Stobart was eager to keep flights at its main asset, Southend Airport. And Cyrus thought it might make money if the business was resuscitated.
The trio were slow to act - a rebranding to Virgin Connect never happened, and losses continued to rise. A cold shoulder from the government and a rapid drop in bookings thanks to the coronavirus sealed the airline's fate.
https://www.bbc.co.uk/news/business-51746564