U.K.’s Flybe goes into liquidation six months after Thomas Cook collapses

Only six months after the collapse of Thomas Cook which left over 150,000 passengers stranded across the globe, the U.K.s Flybe has now gone into liquidation, despite promises six weeks ago from the government to bail out the ailing domestic carrier. 

Flybe, which employed over 2,000 staff, announced that all further flights had been grounded as of today (Wednesday March 5). Flybe had been operating at an annual loss of £20 million (US$26 million) per annum when the domestic carrier, which was responsible for approximately 40% of all domestic U.K. flights, was taken over by Connect Airways, a consortium comprising Virgin Atlantic, Stobart Aviation and Cyrus Capital Partners some nine months ago. 

At the beginning of January, the government was approached to aid the loss-making carrier in the form of deferring an overdue tax payment, providing a potential loan and a review of air connectivity along with air passenger duty (APD) charges. The principal bone of contention was that APD charges were levied on all passengers departing a U.K. airport but, as Flybe’s flights were domestic, the APD charge was doubled for them on either leg of a return flight. 

The carrier was also struggling with increased fuel costs and disruption to flight demand caused by uncertainty through Brexit. However, the ‘final straw’ came with the outbreak of COVID-19 and the consequent reduction in passenger numbers. Unite’s national officer for aviation, Oliver Richardson, said: “The UK economy is highly dependent on a viable and supported regional airline and airport network. For central government not to support and nurture this, especially as we deal with the twin uncertainties of the Covid-19 virus and the changes that will come with Brexit, is unhelpful and irresponsible.” 

Shadow Transport Secretary Andy McDonald said the loss of Flybe would create “real anxiety” across the U.K. The British Airline Pilots’ Association, BALPA, hit out at the government and Connect for the collapse. The trade union’s general secretary, Brian Strutton, commented: “Six weeks ago, when the ownership consortium lost confidence, the government promised a rescue package, apparently at that time recognizing the value of Flybe to the regional economy of the U.K. Throughout, pilots, cabin crew and ground staff have done their jobs brilliantly, while behind the scenes the owners and, sadly, government connived to walk away. Flybe staff will feel disgusted at this betrayal and these broken promises.” 

Source: AviTrader