Flybe Insists Normalcy while Troubles Mount
By: Nc Airways
Tags: Aviation, News, Airlines

Flybe has now become a new symbol indicating that the airline sector continues to struggle under the weight of an industry price war and bad management.

Flybe sees troubles mount

The European airline Flybe, until now, used to handle almost 50% of the UK’s domestic flights outside of London. It was Europe’s biggest regional carrier.

January 12, 2020. Flybe has been shaken by suggestions that it is in a new struggle for survival.

Read more: Airlines drop dead.

At present, Flybe is facing mounting damages and has a bitter experience from weaker-than-usual demand over the winter months across the aviation industry. It has been a season of ambiguity that has punched the aviation industry because the Brexit referendum has diminished demand for travel in recent years.

Moreover, Flybe seems to be seriously hit from the declining value of the pound since the 2016 Brexit referendum. A high proportion of its payments are in dollars, while its incomes are in sterling.

Flybe’s market share is shrinking fast. Its competitors have moved forward in Flybe’s established havens. It has now conceded its space in Bristol, where Easyjet has authenticated itself as the major player flying to Belfast, Edinburgh and Glasgow.

It is not even a year since a buyout by a consortium including Virgin Atlantic, Cyrus Capital and Stobart Group took place.

The said consortium acquired Flybe’s assets in March 2019. It paid £2.8m for Flybe’s plans and another £2.2m for the origin company. It agreed to inject £100m more into the sick airline’s turnaround plan, pledging to rename it as Virgin Connect in 2020.

Since then, neither Virgin nor Flybe has published financial outcomes for the company. Virgin Atlantic boss Shai Weiss disclosed in October 2019 that transforming the strained company, and to “keep Flybe flying”, were their priorities.

How to survive

Today, the company is said to be locked in survival talks. It is attempting to persuade the government to give it a salvation package, as Big Four auditor EY was put on notice to examine any administration means should Flybe run out of money. Flybe’s financial stress are being revealed now. It has been four months when the travel firm Thomas Cook was shut down. Then, the government refused to bail Thomas Cook out.

Questions for Flybe

The big questions remain: Does Flybe deserve additional financing amid rising losses? Should the government facilitate emergency funding in such a situation?

Flybe has already been bailed out once. It has been struggling to secure fresh finance. What will it do with it? Can it ever be able to repay?

Will the 10,000 customers ever get their due refunds from the collapsed Thomas Cook ?

Though Flybe is assumed to be a vital social and cultural link for many marginal economies, but should it be at the cost of government’s money? Can the airline only be a liability to the Nation?

Read more: Thomas Cook went bust with loads of liabilities

Flybe’s chief executive Mark Anderson has to warn the 2400 workers against “unhelpful and unproductive speculation”. He has to plead with them not to give away details of the company’s financial situation.

The British Airline Pilots Association has responded bitterly to the news about the “secret” discussions, saying the union had not been consulted. Trade union Unite said it was attempting an “urgent meeting” with Flybe to know the difficulties. Worried Flybe customers and aviation followers don’t know whether to laugh or cry. If Flybe goes bust, prices from UK to Germany may go up by 50%.

Flybe’s response

Despite such a situation, Flybe remained reserved on reports that it is plunging towards collapse soon. The airline contends that it is business as usual for the company. The struggling Flybe was unable to comment on the reports. It could only state, ‘We don’t comment on rumour or speculation.’ It asserted, ‘ We continue to focus on providing great service and connectivity for our customers, to ensure that they can continue to travel as planned”.

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