Government confirms Flybe will continue to operate
Shareholders agree to put in more money
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Your support makes all the difference.Britain’s biggest regional airline, Flybe, will continue to operate after rescue talks with the Government proved successful.
“Delighted that we have reached agreement with Flybe’s shareholders to keep the company operating, ensuring that UK regions remain connected,” said business secretary Andrea Leadsom. “This will be welcome news for Flybe’s staff, customers and creditors and we will continue the hard work to ensure a sustainable future.”
Flybe’s shareholders have agreed to invest more money in the airline, according to BBC business editor Simon Jack.
He tweeted: “Government pledges to review air passenger duty in run up to budget but will make changes in line with their zero carbon ambitions.”
The Independent's Simon Calder has put together an explainer answering key questions about the Flybe rumours.
Meanwhile, severe gales of up to 90mph in Ireland the western half of Great Britain are affecting regional flights.
The worst-affected airport at present is Shannon in the west of Ireland. Some Aer Lingus flights to and from Birmingham, Edinburgh and Heathrow have been grounded.
The British Airways flagship service from London to New York, the business-class only flight BA1, has been cancelled; it normally refuels at Shannon en route to JFK.
Nigel Frith, a senior market analyst at AskTraders, said:
Flybe is lining up to be the latest victim of an increasingly challenging industry, as the regional airline carrier stares down the barrel to potential administration.
As one of the UK’s best-known airline brands, news that it is on the brink of collapse shows just how tough conditions are amid rising costs, currency fluctuations, increased competition, lingering uncertainty related to Brexit and a less confident consumer. Winter is typically a difficult time for airlines and this winter looks to be a particularly harsh one for Flybe.
More Brexit clarity is needed in order for consumer confidence to return and this still looks to be some way off. Questions are now being raised over whether the rebrand as Virgin Connect this year will go ahead.
Alana Gomez, spokesperson for flight-comparison site jetcost.co.uk, said:
Following the collapse of Thomas Cook last September, this morning spells further trouble for the travel industry as a whole. As Europe’s biggest regional airline, Flybe not only holds great importance for the many passengers it ferries back and forth, but also to local businesses and communities. As always, the collapse of a major airline or travel company would have massive implications for the passengers unable to get to their destination, as well as the thousands of jobs that are hanging in the balance.
Given that Flybe handles the majority of domestic flights outside of the capital, the potential collapse of the airline could have a huge impact on people being able to get to and from work. In many cases, flying domestically is actually a more cost-effective mode of travel than taking the train, so airlines that offer domestic flights, like Flybe, hold great importance, and must be saved.
Flybe says it won't "comment on rumour or speculation" and is "ensuring customers can travel as planned".
Tony Bell, Prospect national secretary, responding to reports that Flybe may be close to collapse, said:
These reports are very troubling and will cause yet more worry for Prospect members at Flybe less than a year after the company was taken over with the promise of additional funding.
As the main union at Flybe, Prospect will seek immediate talks with the company to clarify the situation.
Flybe provides much needed connectivity to many of our smaller and regional airports – it is important that that connectivity, and the skilled jobs it implies, is maintained.
Unite assistant general secretary, Diana Holland, said:
The speculation about Flybe’s future is deeply unhelpful and incredibly unsettling for the company’s loyal workforce.
Unite is now seeking an urgent meeting with the company to fully understand the challenges Flybe is facing.
Unite is committed to helping ensure the future of the company and to preserve jobs but this can’t be achieved if the union is kept in the dark.
It is essential that the government plays an active role in helping to ensure that Flybe continues to operate. It is not acceptable for the government simply to prepare for failure.
The government must demonstrate that it has learnt the lessons from the collapse of Monarch, which it failed to apply during the collapse of Thomas Cook.
The government must implement both the Airline Insolvency Review and the Insolvency and Corporate Governance Review at the earliest possible opportunity. It has previously committed to do so, but actions speak far louder than words.
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