Airline Flybe collapses into administration amid coronavirus outbreak

  • Video report by ITV News Businesses and Economics Editor Joel Hills

Europe’s largest regional airline Flybe has collapsed into administration, sparking fierce condemnation from unions and politicians.

The carrier narrowly avoided going bust in January but continued to lose money since then.

A drop in demand caused by the coronavirus outbreak “made a difficult situation worse” for Flybe, an airline source said.

The airline announced in the early hours of Thursday it had ceased trading with immediate effect and that administrators had been appointed.

Crisis talks were held throughout Wednesday to try to secure a rescue package, but no deal was agreed.

The flight departure boards showing cancelled flights at Glasgow Airport. Credit: PA

All Flybe flights and those operated by sister airline Stobart Air have been cancelled, the Civil Aviation Authority said in a statement.

However if you are booked to travel on a Blue Islands or Eastern Airways operated flight, these are still expected to operate.

Flybe was bought by a consortium of Virgin Atlantic, Stobart Group and Cyrus Capital in February 2019, after running into earlier financial problems.

In a statement, chief executive Mark Anderson said the company had made “every possible attempt” to avoid collapse but had been “unable to overcome significant funding challenges”.

“The UK has lost one of its greatest regional assets,” Mr Anderson said.

“Flybe has been a key part of the UK aviation industry for four decades, connecting regional communities, people and businesses across the entire nation.

“I thank all our partners and the communities we have been privileged to serve. Above all I would like to thank the Flybe team for their incredible commitment and dedication.”

Transport Secretary Grant Shapps said everyone was "gutted" about the news but added: "We really tried to do everything we could back at the turn of the year.

"Unfortunately, with the situation that has developed with (coronavirus), an already weak company, I'm afraid, just hasn't been able to survive."

He added: "The concern is for people who have found themselves stranded and we've got people at the airport to be able to assist and we're writing to all the other companies - coach companies, train companies - and asking them to assist.

"Then, of course, the people who worked for Flybe, a couple of thousand staff, we will be right alongside them to try and help them get into their next employment."

The company said all Flybe flights were immediately grounded as of Wednesday night and advised all passengers not to travel to airports unless alternative flight arrangements had been made.

Britain's train companies have agreed to provide free travel to stranded Flybe staff and customers over the next week, industry body the Rail Delivery Group said.

Flybe employees at the carrier's Exeter HQ. Credit: ITV News

Unions and politicians have reacted angrily over the collapse of the carrier – which had a staff of around 2,000 and provides a vital service to many regional airports.

Oliver Richardson, national officer for major airline industry union Unite said members and Flybe staff would be "angry and confused" about how and why the airline has been allowed to collapse.

“It is simply outrageous that the government has not learned the lessons following the collapse of both Monarch and Thomas Cook that the much promised airline insolvency review has still not materialised," he said.

Empty Flybe check in desk at Belfast Airport. Credit: PA

“While other European countries are able to introduce measures to keep airlines flying when they enter administration, the UK remains unable or unwilling to do so.”

Karen Dee, chief executive of the Airport Operators Association said it was "impossible to over-estimate" the economic and social value of the airline to the areas it served.

"The Government now needs to urgently step up to the plate to help UK regions recover from this major blow," she said.

Staff at Flybe's Exeter headquarters collecting their belongings. Credit: ITV News

Andy McDonald, Shadow Transport Secretary, said the government had been found "wanting" as he raised concerns about the ripple effect of job losses following the airline's closure.

"It's the wider economic consequences for us that really worry me. The regional connectivity issue is critically important, for example you've got Belfast, Birmingham, Southampton, Exeter, all of these places right throughout the UK are dependent on upon Flybe, and their airports are.

"That just spills out into baggage handling staff and other staff. So the government knew that this was likely to happen, and yet again they've been found wanting.

"The contingency plans have not been prepared to enable us to step in and make sure that we've got some semblance of a domestic airline service preserved today."

Labour MP Ben Bradshaw, whose constituency contains Exeter Airport, where Flybe had its headquarters, tweeted: "A devastating day for @flybe staff, uncertainty for passengers & a big blow to our local & regional economy.

"Why did the Government say #flybe was vital to regional connectivity last month & promise to reform Air Passenger Duty in next week's budget ... to apparently break that promise, which was the last straw for the company."

At Belfast City Airport, Colin Neill, chief executive of Hospitality Ulster, said: "This is simply devastating news for Northern Ireland."

A sign to customers at Manchester Airport. Credit: PA

The chief executive of Belfast City Airport said they were in talks with multiple airlines to fill the routes vacated by Flybe.

Brian Ambrose insisted there was no threat to the future of the airport and no redundancy plans, despite 77% of its routes being operated by Flybe and two-thirds of its passengers using the administration-hit carrier.

Matt Roach, managing director of Exeter Airport, said: "It is a very, very sad day.

"First and foremost, our heartfelt sympathies go out to Flybe staff that have been affected by this.

"Many of them have had a very close working relationship with the airport over the last few years and we are devastated for them."

A spokesman from the Department for Transport said government staff would be on hand at all affected UK airports to assist Flybe passengers in making alternative arrangements.

“The vast majority of Flybe routes are served by different transport options, and we have asked bus and train operators to accept Flybe tickets and other airlines to offer reduced rescue fares to ensure passengers can make their journeys as smoothly as possible,” the spokesman said.

  • ITV News Businesses and Economics Editor Joel Hills explains how Flybe collapsed

Thousands of employees, including baggage handlers, check-in staff and engineers based at regional airports across the UK, are anxiously waiting for news.

Some 95% of flights at Southampton Airport last year were operated by Flybe, according to travel industry data and analytics firm Cirium.

Other major airports where the majority of flights were by the now-failed airline include Belfast City (80%), Exeter (78%), Newquay (66%) and Cardiff (52%).

Birmingham - the UK's seventh busiest airport - had 31% of flights operated by Flybe in 2019.

In a letter seen by ITV News correspondent Geraint Vincent, taxi drivers at Southampton airport were told a dedicated airport service was being cancelled as there would no longer be the demand to justify it.

UK Civil Aviation Authority chief Richard Moriarty 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."

Rory Boland, Which? Travel editor, said it was "terrible news" for Flybe passengers.

"Unlike Thomas Cook’s collapse, most people flying Flybe won’t have Atol protection so the government is unlikely to step in and repatriate those abroad or provide refunds," he told ITV News.

“We know this will be a worrying time for Flybe staff and our Jobcentre Plus Rapid Response Service stands ready to help them find a new job as soon as possible.

“We are working closely with industry to minimise any disruption to routes operated by Flybe, including by looking urgently at how routes not already covered by other airlines can be re-established by the industry.”