Following on from our article last night about the imminent collapse of Flybe, we woke this morning to the news that EY had been appointed Administrators over the plagued airline, citing corona virus as the last nail in the coffin.
The airline narrowly avoided insolvency in January after discussing a government bail out and further financing from shareholders, but Flybe has seen a significant drop in bookings following the outbreak of corona virus. The Exeter-based airline, which operates almost 40% of UK domestic flights, has ceased to trade with immediate effect cancelling all flights and causing the loss of over 2000 jobs.
In a statement from chief executive Mark Anderson, it was stated that although the company had made “every possible attempt” to avoid insolvency, it had been “unable to overcome significant funding challenges”.
The owners of Flybe, Connect Airways, a consortium of airlines including Virgin Atlantic have reportedly invested over £135m in the last year to keep the airline afloat. Flybe requested government assistance in January which caused a backlash from other airlines putting a hold on the much needed £100m bailout.
The loss of the airline is being reported as disastrous for UK regions which are now at risk of not being serviced by the airline industry. The government is now being asked how those vital transport links are to be maintained following the collapse, given that in many areas, Flybe was the only airline to operate domestic flights and the UK economy is highly dependent on a regional airline network.
The airline and rail industry are working hard to get passengers and Flybe staff home safely with all First Rail train operators offering free travel to those affected. Reportedly, EasyJet has offered rescue fares for passengers and free flights to Flybe staff.
With Flybe being the third UK airline to fail following the collapse of Thomas Cook in September last year and Monarch in 2017 and travel being restricted owing to corona virus, does this spell disaster for the airline industry? The government is reportedly under fire for allowing the airline to collapse stating that the proposed amendments to air passenger duty levels in next week’s budget were too little too late for Flybe.
If you or anyone you know has been affected by the collapse of Flybe the BBC has full guidance on your rights HERE