Flybe collapse could cost 3,400 jobs and hurt other UK airports
Business News Submitted By: News Desk January 13, 2020 No Comments 1
The collapse of regional airline Flybe could cause the loss of up to 3,400 jobs and have a "significant impact" on several UK airports, industry experts have warned.
The GMB Union said that if the Exeter-based aviator is not rescued up to 2,000 direct jobs will be at risk – plus a further 1,400 in the supply chain.
Meanwhile, aviation consultant John Strickland said airports such as Exeter and Southampton rely on the carrier for a huge chunk of their business.
He said the failure of Flybe would have "a significant impact in certain communities" and added: "At a market level it doesn't look like very much. But if you look at the regions (Flybe serves), it's dramatic."
A Flybe flight departs from Manchester Airport
The warnings come as Flybe bosses have been locked in talks with the Government in a bid to save the airline.
Discussions were held with the Department for Business, Energy and Industrial Strategy (BEIS) and the Department for Transport (DfT) to see whether they could provide or facilitate emergency financing for the troubled airline.
One Flybe employee said staff only learned of the struggling airline's potential collapse when the story broke in the national media.
The flight crew member – who did not wish to be named – said he and his colleagues had not been told anything by the company before the story broke.
"We are all in a pretty poor mood about it – everyone is very concerned," he said. "We knew nothing about it whatsoever. There were rumours about about a senior meeting last week. They were just rumours though.
"Then I woke up to a flurry of Whatsapp messages and saw the news on the television. You would have hoped the first thing you would hear about it would not be a story on mainstream media first thing in the morning."
A Flybe dash-8 plane at Exeter Airport
A Flybe spokeswoman said: "Flybe continues to focus on providing great service and connectivity for our customers, to ensure that they can continue to travel as planned. We don't comment on rumour or speculation."
Flybe was bought by a consortium consisting of Virgin Atlantic, Stobart Group and Cyrus Capital in February 2019 following poor financial results.
The consortium, known as Connect Airways, paid just £2.2million for Flybe's assets but pledged to pump tens of millions of pounds into the loss-making airline to turn it around.
The holding of rescue talks with the Government indicates the financing requirements have become greater than expected.
If Flybe collapses, it would be the second UK airline to fail in four months, following Thomas Cook going bust.
MPs on the BEIS select committee were scathing of the department for its handling of Thomas Cook's demise.
Business Secretary Andrea Leadsom was particularly criticised for not playing a more active role in discussions between bosses and the Government – with the negotiations and discussions taking place at the DfT.
Flybe at Birmingham Airport
The DfT takes the lead in all aviation matters, but Ms Leadsom is understood to be keen to avoid facing similar attacks.
Nadine Houghton, GMB National Officer, said: "If Flybe goes belly up, it won't just be direct employees at risk but 1,400 supply chain jobs as well.
"Our economy is tanking. The last thing we need is an airline to go under – especially one which provides a vital public service in some parts of the country.
"If Government is serious about infrastructure investment in the regions, it must step in and protect what already exists."
Flybe operates most domestic routes between airports outside London, including connections between England, Scotland and Northern Ireland.
Mr Strickland believes there is unlikely to be "a political will to get involved" in offering financial support to the carrier, as no taxpayers' money was given to stop Thomas Cook or Monarch from collapsing.
He added that regional aviation is "a difficult sector" due to a series of issues, including competition from road and rail transport, Air Passenger Duty and rising fuel costs.
Brian Strutton, general secretary of pilots' union Balpa, said he was "appalled" that the future of another airline "is being discussed in secret with no input from employees or their representatives".
He urged the parties involved to "stop hiding and talk to us".
Flybe is Europe's largest regional carrier, flying around eight million passengers a year to 170 destinations across the continent.
Mr Strutton said: "I am appalled that once again the future of a major UK airline and hundreds of jobs is being discussed in secret with no input from employees or their representatives.
Flybe in the news…
"According to reports, the airline could have collapsed over the weekend which would have been devastating news.
"This is an appalling state of affairs and we demand that the owners of Flybe – Virgin, Stobart and Cyrus – and the Government departments involved stop hiding and talk to us about Flybe.
"We have a right to be consulted and the staff have a right to know what is going on."
Tony Bell, national secretary of union Prospect, 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 is said to be on the brink of collapse
"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."
Rory Boland, editor of magazine Which? Travel, said: "The speculation that Flybe might be the next airline to go under will be a huge concern for its customers and for those who regularly use airports where the airline is the main carrier.
"While flights will be going ahead as normal for the time being, this is a stark reminder for passengers to ensure they have protections such as airline failure insurance and to book flights with a credit card so that they can reclaim the cost with their card issuer should an airline go bust."
Connect Airways chief executive Mark Anderson said in October that the airline would be renamed Virgin Connect and he wanted it to become "Europe's most loved and successful regional airline".
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Flights operated as normal on Monday.
Spokesmen for BEIS and the DfT issued identical statements which read: "We do not comment on speculation or the financial affairs of private companies."
The airline began as Jersey European Airways in 1979, operating regional flights from Jersey.
Its route network grew and it was re-branded British European in 2000, before becoming Flybe in 2002.
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