Flybe collapse: Travel sector reacts as regional airline goes bankrupt
Beleaguered Flybe collapsed into administration in the early hours of this morning, as its long-running bid for survival finally ran out of fuel.
In a statement, the regional airline said: “All flights operated by Flybe have been cancelled with immediate effect”.
The firm added that a slump in demand caused by the coronavirus outbreak had been the final straw for the airline, which had struggled to overcome “significant funding challenges”.
The mood in the travel sector, which has been battered by the spread of the disease, was sombre this morning as business groups reacted to the collapse.
Grant Shapps, Secretary of State for Transport:
Transport secretary Grant Shapps, who had been a key part of negotiations with Flybe over a potential rescue package, said that the collapse was “very sad”:
He tweeted: “Government staff will be on hand at UK airports ready to assist and we’re working with airline, train and bus operators to help people find alternative ways home.
“We are also urgently working with industry to identify how key routes can be re-established by other airlines as soon as possible.
“And we’ll be working with Flybe staff to help them find new work in travel or other industries”.
Richard Moriarty, Chief executive of the Civil Aviation Authority:
Commenting, 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.”
Tim Alderslade, Chief Executive of Airlines UK:
The chief executive of industry body Airlines UK, Tim Alderslade, called on the government to review its policy on air passenger duty in light of Flybe’s failure:
“Flybe’s problems were known to many and the sector as a whole is going through an incredibly tough period with the Coronavirus hitting bookings and dampening demand, and this is being felt across the board.
“That said, this is now the fourth UK airline to go out of business in two years. The Government is right to say aviation is a commercial proposition and the market should win out – but they are not using the policy levers at their disposal to help the sector.
“APD is the prime example of a disproportionate and penalising policy that is actively holding us back”.
Board of Airline Representatives (BAR UK):
Airline trade association BAR UK said that the collapse was a “sad day for UK aviation”:
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“Our thoughts to Flybe staff and customers, and to the entire supply chain on this sad day for UK Aviation. Much has been written but the reality is UK regional connectivity will be badly impacted for quite some time”.
British Airline Pilots Association (BALPA):
Balpa’s general secretary Brian Strutton labelled the collapse “frankly sickening”:
“Six weeks ago, when the ownership consortium lost confidence the government promised a rescue package, apparently at that time recognising the value of Flybe to the regional economy of the UK.
“Throughout, pilots, cabin crew and ground staff have done their jobs brilliantly, while behind the scenes the owners and, sadly, Government connived to walk away.
“Flybe staff will feel disgusted at this betrayal and these broken promises. What happened to shareholders’ promises of a bright future as “Virgin Connect”? What happened to the Government rescue deal?
“It’s frankly sickening that other airlines have gone out of their way to push Flybe over the brink, putting 2,000 people out of work. How are staff going to find new jobs in the current climate?
Virgin Atlantic:
Sir Richard Branson-backed 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.
Chris Tarry, aviation analyst:
Independent aviation analyst Chris Tarry told City PM: “Flybe have needed to restructure very quickly to shrink and survive and then grow beyond that, but the reality was that they had had too much capacity for years and in effect their approach was “have metal, will fly””
“They needed to focus on the double daily routes that accounted for around half of their activity and could manage this with 40 per cent less capacity.
“In the airline industry “cash is king” as it is in many others and if you haven’t much or any and you can’t generate it through at the very least forward bookings there is only one outcome”.
John Strickland, aviation consultant:
John Strickland, independent aviation consultant, told the BBC that the coronavirus outbreak was “the straw that broke the camel’s back” for Flybe:
“It’s a very sad state of affairs for Flybe but it’s not a surprise. It’s been in the making for some time [as] Flybe has been loss making for many tears.
“Flybe is a very large airline with over 60 aircraft. It’s really too big for the job it’s been trying to do and that comes from over ambition from the management in the past. Successive generations of management have tried to reduce that”.