Europe’s largest regional airline ceased operations last night, after a very long fight for survival, which even included an acquisition by Virgin Atlantic.
Flybe was purchased in early 2019
Flybe is a British regional airline, and until early 2019, it was the largest independent regional airline in Europe. Flybe has a fleet of about 75 aircraft, including about 60 turboprops and about 15 Embraer jets.
Flybe was struggling financially (as has been the case for so many airlines in Europe), and at the beginning of 2019 the airline was purchased by the Connect Airways consortium, backed by Virgin Atlantic and Stobart Aviation. The airline was purchased for next to nothing (in airline terms) — around £2m.
When Flybe was taken over, the Connect Airways consortium promised to inject £100m into the airline. That included £20m to support the immediate operations, and a further £80m to be invested in the future.
The plan was for Flybe to rebrand as Virgin Connect, given that Virgin Atlantic has long struggled with the regional market. The airline had tried their hand at operating select regional routes back in 2013 with “Virgin Atlantic Little Red,” but the concept didn’t work out, and was discontinued within a couple of years.
Flybe was still on the brink of collapse
At the beginning of this year there started to be stories about how Flybe was looking to secure additional funding amid huge losses.
Several weeks ago the UK government said they were looking at options for a rescue plan, though nothing ended up coming of this. The coronavirus outbreak seems to have been the nail in the coffin for the airline.
Winter is already a tough time of year for regional airlines in Europe, so when you add in reduced demand from coronavirus, the airline was in an even tougher situation.
Flybe posted the following notice on their website:
Flybe entered Administration on 5 March 2020 and Alan Hudson, Joanne Robinson, Lucy Winterborne and Simon Edel of EY have been appointed as Joint Administrators.
All flights have been grounded and the UK business has ceased trading with immediate effect.
Those with tickets on Flybe are of course being advised not to go to the airport, and to make alternative plans. There are email addresses listed for employees, creditors, suppliers, and media, all of which are EY emails (Ernst & Young, not Etihad).
Virgin Atlantic issued the following statement about the situation, given their involvement with the airline:
“We are deeply disappointed that Flybe has been unable to secure a viable basis for its continuing operations and has therefore entered administration.
Virgin Atlantic, along with Stobart Group and Cyrus Capital Partners, formed the Connect Airways consortium which intervened in 2019 to prevent the collapse of Flybe and keep Europe’s largest regional airline flying. With customers and staff at the front of our minds, over the past 14 months the consortium has invested more than £135m to keep the airline flying for an extra year, maintaining 2,400 people in employment and ensuring customers could keep traveling. This amount includes approximately £25 million of the £30 million committed in January 2020, alongside a Time to Pay arrangement with HM Treasury for Air Passenger Duty to the value of £3.8 million.
Sadly, despite the efforts of all involved to turn the airline around, not least the people of Flybe, the impact of COVID-19 on Flybe’s trading means that the consortium can no longer commit to continued financial support.”
It’s sad to see Flybe go out of business, especially given that they operated unique routes that didn’t otherwise have much service.
Virgin Atlantic sure isn’t having much luck with launching regional operations — first Virgin Atlantic Little Red didn’t work out, and now the Virgin Connect concept failed before the rebranding even happened.
While coronavirus is partly being blamed here, the reality is that the airline was on the brink of collapse before the outbreak started, so I think that may have just caused the inevitable to happen sooner rather than later.
(Featured image courtesy of [email protected])