Sector reacts as regional airline Flybe collapses

posted on 5th March 2020 by Eddie Saunders
Sector reacts as regional airline Flybe collapses

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

Ralph Hollister, Analyst, Travel & Tourism at GlobalData: “Flybe blamed a number of external factors for its prolonged demise such as maintenance costs, the weaker pound and rising fuel costs. However, its competitors had to deal with these issues too. The main difference is that Ryanair and British Airways possess focused business models. Flybe was caught between the two, offering short-haul flights for prices that were not necessarily low cost.

The impact of coronavirus may have also provided the perfect opportunity for a Virgin Atlantic led consortium to stop injecting money into a business that seemed to be some way away from achieving profitability.

Attempts by major European carriers to dominate the market have led to an ongoing price war, which has resulted in a growing list of airline casualties. One of the first was UK airline Monarch, which went into administration in 2017. This incident should have set alarm bells ringing for Flybe. Unprofitable routes should have been scaled back much sooner than they were.

Coronavirus could determine the fate of other struggling airlines on a global scale as world-wide demand for travel plummets. Larger airlines are also not immune from the impacts of the virus. Virgin itself announced emergency measures, including cutting executive pay, and urging other staff to take unpaid leave.”

Richard Moriarty Chief Executive at the UK Civil Aviation Authority, said: “This is a sad day for UK aviation and we know that Flybe’s decision to stop trading will be very distressing for all of its employees and customers.

We urge passengers planning to fly with this airline not to go to the airport as all Flybe flights are cancelled.  For the latest advice, Flybe customers should visit the CAA website or the CAA’s Twitter feed for more information.

Flybe also operated a number of codeshare partnerships with international airlines.  If you have an international ticket you should make contact with that airline to confirm your travel arrangements.”

Virgin Atlantic, which led the consortium which helped keep Flybe afloat in 2019, said: “We are deeply disappointed that Flybe has been unable to secure a viable basis for its continuing operations and has therefore entered administration.

Sadly, despite the efforts of all involved to turn the airline around, not least the people of Flybe, the impact of Covid-19 on Flybe’s trading means that the consortium can no longer commit to continued financial support.

Ryanair’s Alejandra Ruiz said: “Flybe customers can continue to enjoy the lowest fares and most reliable service by switching to Ryanair, and we’ve released rescue fares to assist customers affected by Flybe ceasing operations.

We are working with the CAA to accommodate passengers who may have been left stranded or have had their travel plans disrupted by the collapse of the airline. We again call for more robust and frequent stress tests on financially weak airlines and tour operators so customers are not the ones who suffer.

Customers can fly at fares starting from just £19.99 until the end of April, and these rescue fares are on sale now until midnight Sunday 8 March, only on the Ryanair.com website. Since these amazing low fares will be snapped up quickly, customers should log onto www.ryanair.com and avoid missing out.”.