Flybe to quit Gatwick - company statement

Flybe confirmed to the London Stock Exchange today at 0700 that it has sold its arrival and departure slots at London Gatwick airport, thus bringing to an end Flybe’s 22 year record of providing high-frequency air services from the UK regions to the airport. Flybe will continue to fly all its routes until the end of March 2014. The slots have been sold to Easyjet for a cash sum of £20million.

The decision is as a result of the pricing regime applied by the airport’s owners to the operators of smaller, regional aircraft which, in Flybe’s case, has resulted in a 102% rise over the last five years. In a well-publicised, lengthy and expensive complaint, the airline used the Airports Act 1986 to argue to the Civil Aviation Authority (CAA) in 2010 that Gatwick was acting in an anti-competitive and discriminatory manner. Despite support from other airlines, communities and governments around the British Isles, the fact that Flybe operates more UK domestic flights than any other airline and has won the airport’s Gold Award for punctuality in every quarter since its introduction in 2009, the CAA ruled in September 2012 that Gatwick was within its rights to raise their landing fees for smaller aircraft, thus paving the way for today’s regrettable announcement.

Flybe will continue to operate as normal all its seven domestic Gatwick routes - from Belfast City, Guernsey, Inverness, the Isle of Man, Jersey, Newcastle and Newquay - until Saturday 29th March 2014, with no changes to pricing, frequency or timings. It also confirmed that there will be no impact upon any other route currently operated from those seven airports and that the funds generated by the sale of the slots will be re-invested in the remaining 159 Flybe routes.

Separate to this announcement, Flybe today updated the London Stock Exchange on the significant positive progress it has made in its plan to return Flybe UK, its UK based scheduled airline, to profitability. Highlights included surpassing its target savings of £25m, with £30m of annual cost savings being delivered for year 2013/14 onwards, and the deal agreed in principle with BALPA (British Airlines Pilots Association) for a 5% reduction in salary in return for extra time off.

Commenting on the departure from Gatwick, Jim French, Flybe’s Chairman and Chief Executive said:

“No business can swallow such a massive increase in such a short period of time and it is with real regret and some anger that we have made this decision. Flybe fully appreciates the implications this will have, not only on individual passengers but also on the wider regional economies that have come to rely on the convenient lifeline connections we provide to Gatwick. However, we have to accept the ugly reality that Gatwick simply doesn’t want smaller, regional aircraft at their airport and, with the absence of a regional aviation strategy and the government’s penalistic and ludicrous policy of charging Air Passenger Duty (APD) on both legs of a domestic flight, I’m afraid it’s inevitable that high frequency services from the UK’s regions will ultimately be squeezed out of Gatwick, as they have been from Heathrow.

“Until March 29th 2014, however, it remains business as usual and I can reassure all our customers that until then Flybe will continue to offer affordable, reliable and above average punctuality on our seven London Gatwick routes with no changes to pricing, frequency or timings. The connectivity we provide for our seven million passengers through major international airports like Manchester, Birmingham, Glasgow, Edinburgh, Southampton, Amsterdam and Paris will mean that hundreds of international connections will also still be available.

“Gatwick airport may not want those connecting passengers, but others do. Flybe will work with our airports across the nation to ensure the UK’s regional passengers don’t get left in the cold.”