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Sat, 11 July 2020

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Flybe collapses after ministers reject call for £100 million rescue package

Flybe collapses after ministers reject call for £100 million rescue package
3 min read

Flybe has collapsed after ministers rejected a call for fresh funding to tide the airline over following a cash crisis.

The UK's Civil Aviation Authority confirmed on Thursday morning that Europe's biggest regional carrier had fallen into administration following the decision not to provide a £100m state loan.

Ministers agreed in January to support the firm with a multi-million pound package that asked shareholders to put more into the business while the Government deferred an outstanding £106m air passenger duty bill.

The company's new owners had appealed to the Government to provide extra support to the stricken operator. 

But the UK's Civil Aviation Authority tweeted just after 3am on Thursday: "Flybe has entered administration. All Flybe flights are cancelled. Please do not go to the airport as your Flybe flight will not be operating.

"For flights operated by franchise partners, passengers should make contact with their airline."

It added: "Flybe customers are urged to make their own alternative travel arrangements via other airlines, rail or coach operators."

In a statement, the firm's chief executive Mark Anderson said the company had made "every possible attempt" to avoid its collapse.

But he said it had been "unable to overcome significant funding challenges".

"The UK has lost one of its greatest regional assets," he 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 meanwhile said it was "very sad" that the airline had "gone out of business after serving passengers for four decades".

He said officials would "be on hand at UK airports ready to assist" passengers hit by the collapse, and vowed that the Government was "working with airline, train and bus operators to help people find alternative ways home".

The Cabinet minister added: "We are also urgently working with industry to identify how key routes can be re-established by other airlines as soon as possible.

"And we'll be working with flybe staff to help them find new work in travel or other industries."

A spokesperson for the Department for Transport said: "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."

They added: "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."

The Liberal Democrats have already warned that the collapse of Flybe, which runs many of the UK's domestic flights outside of London, will leave "a gaping hole in the UK's transport network".

The party's transport spokesperson Munira Wilson said: "Rail connectivity between UK regions is completely inadequate, leaving people across the country with little choice but to fly. Without Flybe, even that option will be gone for many. The Government must find a way to keep key transport links open."

She added: "In addition, the Conservatives must rapidly scale up investment in sustainable transport if we are to create a viable long term solution to connect communities across the UK."

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