Government confirms Flybe will continue to operate
Shareholders agree to put in more money
Britain’s biggest regional airline, Flybe, will continue to operate after rescue talks with the Government proved successful.
“Delighted that we have reached agreement with Flybe’s shareholders to keep the company operating, ensuring that UK regions remain connected,” said business secretary Andrea Leadsom. “This will be welcome news for Flybe’s staff, customers and creditors and we will continue the hard work to ensure a sustainable future.”
Flybe’s shareholders have agreed to invest more money in the airline, according to BBC business editor Simon Jack.
He tweeted: “Government pledges to review air passenger duty in run up to budget but will make changes in line with their zero carbon ambitions.”
Flybe is lining up to be the latest victim of an increasingly challenging industry, as the regional airline carrier stares down the barrel to potential administration.As one of the UK’s best-known airline brands, news that it is on the brink of collapse shows just how tough conditions are amid rising costs, currency fluctuations, increased competition, lingering uncertainty related to Brexit and a less confident consumer. Winter is typically a difficult time for airlines and this winter looks to be a particularly harsh one for Flybe.
More Brexit clarity is needed in order for consumer confidence to return and this still looks to be some way off. Questions are now being raised over whether the rebrand as Virgin Connect this year will go ahead.
Following the collapse of Thomas Cook last September, this morning spells further trouble for the travel industry as a whole. As Europe’s biggest regional airline, Flybe not only holds great importance for the many passengers it ferries back and forth, but also to local businesses and communities. As always, the collapse of a major airline or travel company would have massive implications for the passengers unable to get to their destination, as well as the thousands of jobs that are hanging in the balance.
Given that Flybe handles the majority of domestic flights outside of the capital, the potential collapse of the airline could have a huge impact on people being able to get to and from work. In many cases, flying domestically is actually a more cost-effective mode of travel than taking the train, so airlines that offer domestic flights, like Flybe, hold great importance, and must be saved.
These reports are very troubling and will cause yet more worry for Prospect members at Flybe less than a year after the company was taken over with the promise of additional funding.As the main union at Flybe, Prospect will seek immediate talks with the company to clarify the situation.Flybe provides much needed connectivity to many of our smaller and regional airports – it is important that that connectivity, and the skilled jobs it implies, is maintained.
The speculation about Flybe’s future is deeply unhelpful and incredibly unsettling for the company’s loyal workforce.Unite is now seeking an urgent meeting with the company to fully understand the challenges Flybe is facing.Unite is committed to helping ensure the future of the company and to preserve jobs but this can’t be achieved if the union is kept in the dark.It is essential that the government plays an active role in helping to ensure that Flybe continues to operate. It is not acceptable for the government simply to prepare for failure.The government must demonstrate that it has learnt the lessons from the collapse of Monarch, which it failed to apply during the collapse of Thomas Cook.The government must implement both the Airline Insolvency Review and the Insolvency and Corporate Governance Review at the earliest possible opportunity. It has previously committed to do so, but actions speak far louder than words.
News that Flybe is rumoured to be in rescue talks to secure additional funding comes as no real surprise as a number of British airlines have struggled to operate in an increasingly difficult environment in recent years.
British airlines have been hit hard by the combination of a post-Brexit referendum slump and larger airlines like easyJet dominating slots at several key regional airports.
GlobalData figures show that the number of airline seats sold in the UK increased by almost 70 million between 2014 and 2019. However, Flybe has found it difficult to compete, accounting for only 3.4 per cent of the total seats sold in 2018.
With GlobalData forecasting the total revenue of the British aviation industry to grow by over $13 billion between 2019 and 2022, it will be interesting to see if smaller airlines will continue to struggle or be able to take advantage of the growing market. However, it is difficult to see how they will turn it around and win market share from the likes of Ryanair and easyJet.
Investigate alternate flight options
Without scaremongering, it is advisable that anyone with a scheduled Flybe flight should look into alternative flights and have an idea of how much these will cost.
Should the airline collapse, the government would work on assisting those stranded abroad in getting home in an operation similar to Operation Matterhorn, which was used to bring more than 150,000 Thomas Cook passengers back to the UK after it went bankrupt last year.
Investigate alternate refund options
Any passengers who booked their Flybe flights as part of a package holiday through a UK travel agent will be covered by the ATOL protection scheme if the airline goes bust.This means the travel firm will be responsible for arranging alternative flights or providing a full refund.
Those who have paid for their flights with a credit card may be able to recover their money, in full, under the Consumer Credit Act using Section 75.
For flights which cost less than £100 or were paid for using a debit card, the Visa/MasterCard/Amex ‘chargeback’ system can potentially be used to recover the money paid.
Not expect compensation for previous Flybe delays or cancellations
In reality, people who are currently in the process of claiming compensation for a flight delay, cancellation or denied boarding via EU Regulation 261/2004 are unlikely to receive it. Compensation claims falls to the bottom of the pile when an airline collapses, with money to secured creditors and airline staff coming first.