Flybe’s planes at risk of being impounded as wait for rescue package goes on
Embattled Flybe is facing a nervous wait over its potential £100m taxpayer loan amid reports that air traffic controllers could impound the regional airline’s planes.
According to mortgage records, many of Flybe’s planes are owned by other firms such as NordLB and Nordic Aviation Capital, who lease them to Flybe to use.
The Sunday Telegraph reported that the firms are monitoring the situation closely. Firms which lease planes to aircrafts are usually allowed to monitor debts owed to air traffic controllers in order to protect their interests.
The planes can be impounded by the Civil Aviation Authority (CAA) on behalf of Eurocontrol, a air traffic control body, which can then sell them on to recover debts.
Due to a regulation known as a “tail lien”, the body can impound the planes whether or not the airline in question is the actual owner.
Debts to air traffic controllers, which could add up to millions of pounds according to one source, must be paid within 30 days.
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Last week it was reported that Flybe had been in talks with baggage handlers and other suppliers to postpone the payment of its debts until its rescue package is approved.
The struggling airline has also asked airports to be patient regarding unpaid landing fees.
Last month Flybe staved off collapse after shareholders and the government struck a controversial deal that will review the regional airline’s air passenger duty contributions.
Major shareholders, including Virgin Atlantic and Stobart Group, pledged to inject “additional funding” to keep the airline running. They said this would come “alongside government initiatives”.
The deal came a day after reports emerged that Flybe was in a perilous situation and facing an imminent collapse that could have cost 2,000 jobs ahead of the quiet winter period.
The deal has caused a great deal of controversy, with Ryanair owner Michael O’Leary threatening to sue the government over the rescue package.
Ryanair claimed the Flybe business model is “neither profitable nor viable and has lurched from failure to failure repeatedly over the last 20 years”.