Thousands of jobs at risk as Flybe collapses

LONDON: Europe’s largest regional airline, Flybe, has finally collapsed into administration, threatening thousands of jobs and the future viability of a number of airports across the UK.

Flybe’s demise, announced early on Thursday and blamed in part on a drop in demand caused by the coronavirus outbreak, sparked fierce condemnation from unions and opposition politicians, who criticised both the airline’s owners and the government for failing to act to save it.

Transport Secretary Grant Shapps said everyone was “gutted” about the news but added: “We really tried to do everything we could back at the turn of the year. “Unfortunately, with the situation that has developed with (coronavirus), an already weak company, I’m afraid, just hasn’t been able to survive.”

The carrier narrowly avoided going bust in January but has continued to lose money since then. The airline announced in the early hours that it had ceased trading with immediate effect and that administrators had been appointed after crisis talks on Wednesday failed to secure a rescue package.

All Flybe flights and those operated by sister airline Stobart Air were cancelled but some other airlines and all rail operators stepped in to offer help to stranded passengers and staff. Flybe was bought by a consortium of Virgin Atlantic, Stobart Group and Cyrus Capital in February 2019, after running into earlier financial problems.

In a statement, chief executive Mark Anderson said the company had made “every possible attempt” to avoid collapse but had been “unable to overcome significant funding challenges”. Unions and politicians reacted angrily to the collapse of the company — which had a staff of around 2,000 — just weeks after it narrowly avoided going under.

In January, Flybe agreed a deal to defer tax payments of “less than £10 million” with HM Revenue and Customs, while ministers pledged to review Air Passenger Duty (APD). But other airlines, including Ryanair and British Airways owner International Airlines Group (IAG), complained that the agreement breached EU competition law and state aid rules.

Shadow transport secretary Andy McDonald said the loss of Flybe would cause “real anxiety” throughout the country.

Labour MP Ben Bradshaw, whose constituency contains Exeter Airport, where Flybe had its headquarters, tweeted: “A devastating day for @flybe staff, uncertainty for passengers & a big blow to our local & regional economy.”