Well, it looks like Europe’s largest regional airline is on the brink of collapse yet again, despite them recently being acquired by a group that includes 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.
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 on brink of collapse again
Sky News is reporting that Flybe is trying to secure additional funding amid huge losses. Accounting firm EY has been put on standby to handle the administration of the airline.
According to the story, the UK’s Department for Transport and Department for Business, Energy, and Industrial Strategy, have been briefed, and are working on determining whether the government could provide any emergency financing for the company.
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. So the airline has already blown through at least £20m.
As of now, the only statement that the airline has issued is as follows:
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.
It would appear that Flybe is on the verge of entering administration for the second time in about a year.
While I understand how the concept of acquiring Flybe was attractive to Virgin Atlantic, if the airline has blown through tens of millions of pounds in the past year, you sure have to wonder what exactly they’re hoping to accomplish.
While a regional route network would be helpful to Virgin Atlantic, it’s questionable if the business model could be profitable anytime soon.
The other issue is the slow pace at which Flybe’s operations have at all been aligned with Virgin Atlantic. The airline is supposed to rebrand as Virgin Connect sometime in 2020, as the focus up until now has been on improving the performance of the airline. It seems like that hasn’t been working out too well, though.
This should be an interesting one to watch…
(Featured image courtesy of [email protected])