Flybe Rumoured to be on Verge of Collapse

British regional airline Flybe is rumoured to be trying to secure emergency funding from the UK Government in a bid to prevent it going bust. So, are about to see a situation where Flybe calls in the administrators? Let’s hope not, although it’s sounding serious.

The airline has been in business since 1979 and operates routes 210 routes between 13 countries. It has hubs in Birmingham and Manchester. Some of the regional routes it operates are considered vital to remote parts of the UK.

Flybe has had a turbulent few years, struggling with loss making routes and over-capacity. A failed acquisition attempt by Stobart Group added to their woes and left the share price at an all-time low. They’ve been struggling with heavy losses for years.

Flybe’s future appeared to have been secured at the start of 2019, following a cash injection from a £2.2m sale to a consortium led by Virgin Atlantic. This sale was supposed to result in the airline being rebranded as Virgin Connect in 2020.

It would appear the airline has still been unable to get its losses under control and is battling very difficult trading conditions in the aviation sector. Operating margins are lower across the board, amid excess capacity and lower passenger numbers. Weaker carriers will struggle to make it through this downturn. If Flybe calls in administrators, thousands of jobs will be at risk and the future of some regional UK routes will be in doubt.

Rumours that Ernst & Young are ready to step in as administrators, and that the UK Government is already aware of the situation, both sound worryingly similar to the weekend prior to Thomas Cook’s collapse.

In response to the speculation Flybe tweeted:
“Flybe continues to provide great service and connectivity for our customers while ensuring they can continue to travel as planned. We don’t comment on rumour or speculation.“

News on whether Flybe calls in administrators, or there’s a fresh injection of cash into the business, can only be hours away.


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