After receiving a lifeline by a Virgin Atlantic-led consortium last year, Sky News is reporting that Exeter-based Flybe is frantically seeking financial support in order to avert collapse. The UK government is reportedly assessing whether they can intervene.
In a developing story strangely reminiscent of the collapse of Thomas Cook last September, Exeter-based British regional carrier is reportedly seeking government assistance to avert a collapse. Sky News reported Monday that Europe’s largest regional airline was involved in critical survival talks with the British government and other stakeholders Sunday evening. The airline received a temporary reprieve last year after being bailed out by a Virgin Atlantic-led consortium bailout. Flybe, the loss-making British regional carrier, handles more than half of the UK’s domestic traffic outside of London and is frantically seeking new financing. According to Sky News, the accountancy firm EY has been retained to handle the Flybe Group’s potential administration, the British equivalence of bankruptcy.
Flybe serves more than 80 airports across the UK and Europe with a fleet of Bombardier Q400 turboprops (now DeHavilland Canada Dash 8s) and Embraer E175/E195 regional jets. The airline maintains a significant presence at UK airports in Exeter, Birmingham, Manchester, Southampton, Cardiff and Aberdeen. Last March, the airline’s assets were acquired by a Virgin Atlantic-led consortium including the Stobart Group and Cyprus Capital Partners for the nominal sum of £2.8M. Sunday night on Twitter, the airline stated,
“Flybe continues to provide great service and connectivity for our customers while ensuring they can continue to travel as planned. We don’t comment on rumor or speculation.”
While a bailout for Thomas Cook never materialized, it is unclear whether a government bailout for Flybe will occur, or how it would be structured. The BBC reported on Monday that in an internal e-mail to Flybe employees, company CEO, Mark Anderson said,
“All my energy, and that of our Leadership Team, is very focused on continuing to turn Flybe, soon to be Virgin Connect, around and deliver the heartfelt service that our customers expect. I do appreciate that the headlines some of you have already read are disturbing, but I want you to know that we are determined to do everything we can to make this work…”
Although the Virgin-Atlantic consortium has invested tens of millions of pounds into Flybe, losses haven’t been stemmed as quickly as hoped. Employing over 2,000, Flybe is a vital link for underserved communities in the UK and unlike the collapse of Thomas Cook, the loss of the regional carrier would be devastating for some regions with marginal economies. In this way, the UK government may have a vested interest in propping up the carrier, though it might be viewed as unfair by some.
Source(s): Flybe, Sky News, BBC