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03/09/20

UK airline Flybe has gone into administration - 2,000 jobs at risk


Source: BBC.com

UK airline Flybe has gone into administration, putting 2,000 jobs at risk, after a bid for fresh financial support failed.

The Exeter-based carrier said the impact of the coronavirus outbreak on demand for air travel was partly to blame for its collapse.

Its website now advises customers to "not travel to the airport" unless they have arranged an alternative flight.

Flybe boss Mark Anderson said he was "very sorry" for the firm's collapse.

In a letter to the airline's staff, 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."

In response to the collapse, the UK government said it was ready to help Flybe's workers find new jobs and would work with other airlines to replace services: "We are working closely with industry to minimise any disruption to routes operated by Flybe, including by looking urgently at how routes not already covered by other airlines can be re-established by the industry. "

Transport Secretary Grant Shapps said everyone was "gutted" about the news but added: "We really tried to do everything we could back at the turn of the year.

"Unfortunately, with the situation that has developed with [coronavirus], an already weak company, I'm afraid, just hasn't been able to survive."

What does it mean for staff?

Thousands of jobs are at risk following the regional airline's collapse.

Katherine Densham, a Flybe cabin crew member, had been due to fly to London City Airport from Exeter on Thursday. She has worked for the airline for 13 years after joining the firm straight from college.

She told the BBC that staff were feeling "really sad" and that she was not sure what to do next.

Balpa, the pilots' union, said that pilots, cabin crew and ground staff "have done their jobs brilliantly" throughout its struggle.

The union questioned how staff "are going to find new jobs in the current climate", although companies such as South Western Railway have already been calling out for job applications from Flybe staff on social media.

What went wrong at the airline?

Flybe ran into difficulties last year and was bought by a consortium that includes Virgin Atlantic.

But its troubles persisted, and it narrowly avoided going bust in January this year. The new owners said they would pump £30m into the business to keep it afloat, but appealed to the government for additional support.

Flybe, which served destinations from the Channel Islands to Aberdeen, had also been hoping for a £100m lifeline from the government and changes to Air Passenger Duty taxes.

But the news that it may benefit from government help sparked a backlash from its rivals. British Airways-owner IAG filed a complaint to the EU arguing Flybe's rescue breached state aid rules.

Virgin Atlantic said it was "deeply disappointed" that Flybe had gone bust, adding that the consortium had invested more than £135m in keeping the airline flying for an extra year.

While its financial problems were already apparent, a Flybe insider told the BBC the impact of the coronavirus on the travel industry had "made a bad situation much worse".

Air transport expert John Strickland added that the regional market was extremely challenging for any airline, but that Flybe had made matters worse some years ago through over-ambitious expansion.

"It's really too big for what it's trying to do," he said.

What does Flybe's collapse mean for the regions?

Although Flybe is small compared to the likes of British Airways, Ryanair or EasyJet, the loss of the operator has been described as "disastrous" for UK regions.

Mr Strickland said Flybe is "small in the scale of the UK market as a whole, but if you're flying out of Exeter, Newquay or specifically Southampton it really is one of the only airline choices... so a number of regional groups will risk not being served".

Following last December's general election, Prime Minister Boris Johnson pledged to "level up" the UK's regions, after the Conservatives won seats in previous Labour strongholds. He appeared ready to intervene to prop up the airline, considered a key transport link to many parts of the country.

Shadow transport secretary Andy Macdonald said the airline had provided "critical connectivity for many locations" and its collapse would be "disastrous news for passengers and employees alike."

"The government has to answer how those vital links will be maintained following Flybe's collapse. Communities will be concerned about what this will mean for their local economies and the Secretary of State has to come up with answers to these questions as a matter of urgency," he said.

Tim Jeans, chairman of Cornwall Airport, said that he "very much hoped" that other airlines would take up the routes. He said discussions with other airlines would "begin in earnest" soon and he hoped to reinstate services "on those routes hopefully within weeks rather than months".






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