Uncertainty surrounding Flybe highlights wider industry issues

posted on 13th January 2020 by Eddie Saunders
Uncertainty surrounding Flybe highlights wider industry issues

Following today’s news (Monday 13 January) that Flybe is reportedly holding crisis talks with the British government;

Ben Cordwell, Travel & Tourism Analyst at GlobalData, a leading data and analytics company, offers his view on the airline’s current issues: “News that Flybe is rumoured to be in rescue talks to secure additional funding comes as no real surprise as a number of British airlines have struggled to operate in an increasingly difficult environment in recent years.

British airlines have been hit hard by the combination of a post-Brexit referendum slump and larger airlines like easyJet dominating slots at several key regional airports.

GlobalData figures show that the number of airline seats sold in the UK increased by almost 70 million between 2014 and 2019. However, Flybe has found it difficult to compete, accounting for only 3.4% of the total seats sold in 2018.

With GlobalData forecasting the total revenue of the British aviation industry to grow by over $13 billion between 2019 and 2022, it will be interesting to see if smaller airlines will continue to struggle or be able to take advantage of the growing market. However, it is difficult to see how they will turn it around and win market share from the likes of Ryanair and easyJet.”

Rob Burgess, editor of the UK’s biggest frequent flyer website headforpoints.com was the only member of the media invited to Flybe’s staff event last Autumn where the new Virgin Connect branding was unveiled. 

He said: “It is a terrible shame to see Flybe in trouble once again, and we can only hope that the business can be rescued.  The new shareholders have pumped in over £100m since taking over but it seems that this has not been enough to see the airline through the quiet Winter period.

The new strategy seemed sensible, moving away from leisure routes and focusing on ‘visiting friends and family’ and business travel.  The least cost-efficient aircraft have been removed from the fleet and new routes have been announced.  On the bulk of its routes Flybe has no airline competition and there is, somewhere in there, a small but very decent airline waiting to get out.

Should Flybe collapse, it will cause a headache for Virgin Atlantic, who previously employed Mark Anderson, the Flybe CEO.  It had been relying on Flybe providing connecting passengers to its Heathrow and Manchester bases.  Virgin Atlantic has been adding seats at Manchester since Thomas Cook collapsed but if Flybe disappears these new flights will be trickier to fill.”  Mr Burgess Added: “The Government would also need someone like Loganair to step in immediately to provide the routes operated under Public Service Obligations, such as Newquay to London.”

The collapse of Flybe threatens a further 1,400 jobs in the supply chain, GMB analysis reveals. Up to 2,000 direct jobs will also be at risk if the airline fails to secure its future.

GMB members working for Swissport provide ground services for Flybe at Liverpool, East Midlands, Edinburgh and Jersey airports.

Nadine Houghton, GMB National Officer, said: “If Flybe goes belly up, it won’t just be direct employees at risk but 1,400 supply chain jobs as well.

Our economy is tanking. The last thing we need is an airline to go under – especially one which provides a vital public service in some parts of the country.

If Government is serious about infrastructure investment in the regions, it must step in and protect what already exists.”