Flybe collapses after virus weighs on sales
UK’s Exeter-based Airline Flybe has gone into administration, with 2000 job losses after a fresh bid for financial stimulus failed.
The carrier also blames the impact of the coronavirus outbreak on demand for air travel for its collapse. Its website advises customers “not to travel to the airport” unless they have arranged an alternative confirmed flight.
Mark Anderson, CEO in a letter to the airline’s staff said: “Despite every effort, we now have no alternative – having failed to find a feasible solution to allow us to keep trading. I am very sorry that we have not been able to secure the funding needed to continue to deliver our turnaround”.
The UK government said it was ready to help Flybe’s workers to find new jobs and will work with other airlines to replace services. “ We are closely working 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”.
Flybe which carried 9m passengers annually, served destinations from the Channel Islands to Aberdeen, had been hoping for a £100m lifeline and changes to Air Passenger Duty taxes. The carrier ran into difficulties last year and was bought by a consortium which includes Virgin Atlantic, as the new owners pumped in £30m into the business in January to keep it afloat, but appealed to the government for additional support which was not forthcoming.
The government had rejected the idea of a £100m state loan to the ailing airline, leaving Flybe’s management clinging to the hope of a cut to air passenger duty in next week’s budget to help it survives, but was concerned that any cuts to APD might not impact until 2021, which would be too late.
The Consortium had invested over £135m in keeping the airline flying for an extra year.
“If you’re flying out of Exeter, Newquay or specifically Southampton, including 88 of its 102 routes really is one of the only airline choices, not flown by any other airline. Indeed in Southampton, it accounts for about 95 per cent of the activity at that airport, so several regional groups will risk not being served”.
Virgin said this week its Chief executives will take a 20 per cent pay cut for four months and the airline is freezing recruitment and offering employees unpaid leave as the coronavirus saps demand for air travel. Booking was 40 per cent lower than a year ago according to Virgin.
Brian Strutton, general secretary of the pilots’ union Balpa, said that while pilots, cabin crew and ground staff had done their jobs “ brilliantly, the government had “ connived to walkway” from the problem.
Coronavirus cost airline industry $113bn.
In the UK the coronavirus outbreak has reached 90 infected including 3 in Scotland. In Iran, 92 people died and 3, 000 are infected. IN Italy 34 people died and 1, 700 people affected.