News has emerged that UK regional airline Flybe is engaged in talks with the government to save itself from financial collapse. Sources say that Europe’s largest regional airline is working with the UK’s Department of Transport as well as the Department for Business, Energy and Industrial Strategy in hopes that government assistance can keep the struggling airline operating.
The tweet below is Flybe’s public response to rumors of financial difficulties:
Flybe continues to provide great service and connectivity for our customers while ensuring they can continue to travel as planned. We don’t comment on rumour or speculation.
— Flybe ✈ (@flybe) January 12, 2020
Perhaps one of the best points made in response to this is one by Nathan Head, who said:
I'm only just picking up on this story on twitter, but in all fairness, Thomas Cook also denied the "rumours", right up until 2am on the morning their last flight grounded and they went into administration.
— Nathan Head (@nathanhead) January 13, 2020
Details and background
According to Sky News, accountancy firm EY (or Ernst & Young), was asked to be on standby should administration of Flybe Group be necessary. If these reports are true, they indicate the seriousness of the situation.
Flybe was bought out in February by a consortium led by Virgin Atlantic, called Connect Airways. Also in the consortium are Stobart Group and financing firm Cyrus Capital Partners. Flybe is set to rebrand as Virgin Connect later this year. Cyrus Capital Partners owns a 40% share of Connect Airways, while the other partners Virgin and Stobart, each own 30%.
£100m was allocated for Flybe’s turnaround plan. Recent moves have included:
- An increase in services at London Southend starting from Summer 2020
- Cutting routes from Birmingham to Hannover and Hamburg. London City to Dusseldorf has also been cut.
- Birmingham to Berlin Tegel, Hamburg, Hannover, Lyon and Milan Malpensa closed at the end of October but are set to restart in February.
- A pull out of operations in Doncaster Sheffield Airport as well as limiting other services connecting the UK with Europe.
- Closure of its Isle of Man base.
However, insider sources have told Sky News that Connect’s proposed financing requirements had become more onerous, leading to financial uncertainty. Last week, Connect said it was examining potential redundancies. However, it insisted it was holding to its commitment to maintaining its base at Exeter.
If Flybe is unable to get the assistance it needs in the form of a rescue deal, then it’s possible it will have the same fate of other UK airlines like Monarch and Thomas Cook Group. The regional airline has a significant role in UK aviation, operating about 75 aircraft and serving more than 80 airports across the UK and Europe. In the UK alone, it has a significant presence at airports including Belfast, Birmingham, Manchester and Southampton.
Should the airline collapse, roughly 2,000 jobs would be lost which would be a devastating blow to the UK economy.
What do you think needs to be done at Flybe to become profitable? Let us know in the comments!
We made attempts to reach out to Connect Airways, Flybe, and Virgin Atlantic. However, no responses were received at time of publishing. We will update this article if we hear back from any of these groups.