Regional airline Flybe collapses after failed fundraising

UK airline Flybe has gone into administration after failing to raise additional funding. More than 2,000 staff have lost their jobs.

After a long period of financial troubles, falling demand due to the coronavirus outbreak and recent storm disruption have proved to be the last straw.

Last year Flybe was purchased by Connect Airways, a consortium that included Virgin Atlantic, but had struggled with mounting debts and losses. In 2020 the government proposed a £100 million rescue loan and deferral of the company’s tax bill, though rival airlines argued this contravened state aid rules.

Flybe was Europe’s largest regional airline, accounting for 40% of domestic UK flights. Operating domestically, it was disproportionately hit by Air Passenger Duty (APD), a per-passenger tax on all flights taking off in the UK. The government had proposed a review of the tax, but was still bound by EU rules.

Flybe also struggled with overcapacity, in a highly competitive market where companies operate by tight margins.

While primarily a passenger airline, like most other airlines Flybe also transported commercial cargo.

Source: BBC News

Header image: Max Andrey