Impact of coronavirus on flight bookings proves final straw for Europe’s largest regional airline
Gwyn Topham Transport correspondent – The Guardian
A Flybe plane takes off from Manchester airport. It operates almost 40% of UK domestic flights. Photograph: Phil Noble/Reuters
Flybe, Europe’s largest regional airline, has collapsed into administration less than two months after the government announced a rescue deal.
The impact of the coronavirus on flight bookings proved the last straw for the Exeter-based airline, which operates almost 40% of UK domestic flights, as the government stalled on a controversial £100m loan.
The UK Civil Aviation Authority announced early on Thursday morning that the airline had entered administration.
It said all flights were cancelled and urged passengers not to go to airports.
Flybe’s bankruptcy has come just a week before a budget that it hoped would help bolster its precarious finances, after the previous chancellor said he would look again at levels of air passenger duty (APD) .
However, the airline’s owners Connect Airways – a consortium of Virgin Atlantic, Stobart Air and hedge fund Cyrus Capital – have pulled the plug, a little over a year after buying it.
The airline employed more than 2,000 people and was one of the leading carriers at airports including Belfast, Southampton, Manchester and Birmingham. Around 8 million people a year used its services. Unions have warned that other jobs would be put at risk by Flybe’s collapse, and transport links lost on dozens of domestic routes where it is the sole operator.
Flybe has long struggled to balance the books, despite cost-cutting plans and redundancies, and was reporting losses of around £20m a year before the Connect takeover.