Friday, 9 Jun 2023

Flybe goes bust taking down 2,000 jobs after failed £100m rescue plan

Flybe has gone bust taking down 2,000 jobs with it after a failed £100million rescue plan.

The UK Civil Aviation Authority has confirmed the airline has ceased trading with immediate affect, just hours after its final plane landed late last night.

All Flybe flights have been cancelled and customers with bookings have been told not to travel to the airport.

Airline bosses had been attempting to secure a £100million bank loan to save the embattled company.

The firm was also granted a January rescue plan by the Government, agreeing to defer tax payments of "less than £10 million".

It was not enough however, as the global coronavirus epidemic has been blamed for making a "bad situation much worse".

***Do you have a Flybe flight, or work for the company? Tell us your story at [email protected]***

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In a statement issued this morning, the UK Civil Aviation Authority confirmed Flybe has entered administration.

It added: "All Flybe flights, and those operated by Stobart Air, are cancelled. Therefore please do not go to the airport as your flight will not be operating.

"For flights operated by Flybe franchise partners (Eastern Airways and Blue Islands) passengers should make contact with that airline to confirm your travel arrangements."

Insiders at Exeter-based Flybe said coronavirus cutting down the demand for air travel was partly to blame.

Passengers reported being turned away from their flights as staff informed them there would be no more flights.

Peter Smith, an ITV journalist, tweeted: "Has Flybe just ceased operating in front of my eyes?

"Waiting to board a FlyBe flight to Birmingham and all of their flights have just been cancelled.

"Advice from staff is FlyBe 'definitely will not be flying out tomorrow either'.''

Flybe has been hit by a slump in bookings since the outbreak of the coronavirus.

The coronavirus impact on travel "has made a bad situation much worse," insiders told the BBC.

As part of the January rescue deal, it agreed an arrangement to defer tax payments of "less than £10 million" with HM Revenue and Customs.

Ministers also agreed to hold a review into Air Passenger Duty (APD).

The structure of APD – which adds £26 to the price of most return domestic flights such as those operated by Flybe – could be altered in next week's Budget.

Flybe serves around 170 destinations and has a major presence at UK airports such as Aberdeen, Belfast City, Manchester and Southampton.

It flies the most UK domestic routes between airports outside London.

A series of issues have affected the airline's finances, including rising fuel costs, falling demand, competition from road, rail and other airlines, plus a weakening of the pound.

It was bought by a consortium comprising Virgin Atlantic, Stobart Group and Cyrus Capital in February 2019, but has continued to make losses.

Rival Ryanair has predicted the drop in demand for flights due to the coronavirus will result in some European airlines failing in the coming weeks.

A Flybe spokesman would not comment on its financial situation.

A Department for Transport spokeswoman said: "We won't comment on speculation."

At the time of Flybe's rescue, rival airlines complained that they should not be penalised for their own success and should also be given a tax holiday.

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