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BREAKING: Is Flybe on the verge of administration (again)?

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Sky News reported very late last night that Flybe is believed to be on the brink of administration.

Regular readers will know that Flybe was acquired last year for, virtually, nothing (£2m) by a consortium of Virgin Atlantic, Stobart Air and private equity group Cyrus Capital.

Flybe going into administration

In the Autumn, the airline announced that it would rebrand itself as Virgin Connect.  I was the only member of the media invited to the event which unveiled the new name and strategy (I chaired a panel discussion) and there was a real sense of optimism and enthusiasm from the new CEO Mark Anderson and his team.

Substantial changes were announced to its route network, which would effectively have seen it move away from the price-concious leisure market and focus on business and ‘visiting friends and family’ routes.

The three new shareholders had agreed to inject £100m into the airline.  If the story last night is correct, this has not been enough to see it through the difficult Winter period when revenues are at their lowest.

Flybe goes bust

It was stated that advisory group EY had been put in place to handle the administration of the airline if additional funding could not be secured.  The Government was also believed to be involved in talks about providing a credit line to the business.

Whilst Virgin Atlantic has relatively deep pockets – albeit with a desire not to throw good money after bad – I can imagine that Stobart Air and Cyrus Capital may have wanted to draw a line.

There was a plan to inject Stobart Air’s existing airline operations into Virgin Connect – I’m not sure if this was in lieu of injecting cash into the new venture.  I don’t know if this actually took place or not.  It would be bad news if Stobart Air also went under.

Flybe released a short statement early on Monday saying:

“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 rumor or speculation.”

I expect we will hear more about this during Monday …..

Comments (79)

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  • The_real_a says:

    Not sure what the balance sheet was like but maybe they see an opportunity to clear some debt in a pre-pack deal? I mean who else would be genuine competition to pick up the “assets”? Not IAG.

  • Nick says:

    Allegedly they’ve also been holding talks with the government about the possibility of providing or facilitating emergency finance.

    • C77 says:

      Given the number of government subsidised routes FlyBE operate I imagine it’s in their best interest to offer as much assistance as possible.

  • Bert Quigley says:

    Wirh the fsres they charge on some routes, hard tomsee why they haveva cash problem

    • Philip says:

      Indeed.

      And then there’s the “ancillary income” made by penalising travellers £35 for out-of-gauge hand baggage.

      On a recent trip from Belfast City I fell foul of this sneaky income generator, and reckon that around 10 people were similarly caught out. Kerching! £350 for that particular flight, thank you very much.

      And with 30+ flights per day from Belfast City, that’s a cool £10K per day – just from that one airport.

      • Stu N says:

        They do make cabin bag dimensions very clear when you book and also send when online check-in opens, highlighting the cabin bag restrictions. The issue is that bags bigger than their stated dimensions simply don’t fit into overheads on the prop planes.

        • Marcw says:

          You could do like other regional airlines that operate similar airplanes. Hand luggage that doesn’t fit on the overhead compartments are collected at the plane (which are boarded by walking anyway) and once you land, you collect the hand luggage again by the plane.

          Anyway, newer ATR have bigger overhead compartments, but I guess the don’t have any of them.

          • Charlieface says:

            No they only have Dash 8 and Q400

          • Craig says:

            For charlieface, the Dash 8 is the Q400! They also operate Embraer E170/E190 and have dabbled with ATR72 but mostly these were operated by Stobart Air or under the FlyBe AOC for SAS.

        • Andrew says:

          This is the key problem. The Flybe measurements are exactly 55x35x20 and the luggage manufacturers are 55ishx35ishx20ish.

          Timberland brand luggage just sat on top of the cage and wouldn’t go in. 35cm on the label, but 37.5 when measured across the base/wheels. Fortunately I wasn’t flyng FlyBe that day, but just tested the luggage for future reference.

          For Flybe, I use a cheap wheel-less H&M leatherette “bowling bag” which is close enough and will squish in the cage.

        • Philip says:

          You are absolutely right.

          But I had travelled on exactly the same flight barely a fortnight earlier with my habitual hand baggage and there was no quibble whatever.

          Prior to those flights it had been quite a long time since I had travelled on FlyMaybe, and my feeling is that they changed the baggage gauge in the meanwhile for exactly the reasons you state; regular size hand baggage doesn’t fit in the slender Dash overhead lockers.

          • Mary Berry says:

            So, another failing UK company and thousands of jobs at risk, and you’re bitching about hand baggage. Jesus 🤦‍♂️

          • Aston100 says:

            My bag is well within their size limit and yet I struggled to get it to fit their gauge on a couple of occasions, as did several other passengers.
            I strongly suspect foul play with the gauges at certain airports.

          • marcw says:

            @Mary Berry… their business model clearly doesn’t work in the current environment. There’s no guarantee that if I start a business today, it will be successful in 25 years (market and customer behaviour changes,…). If it doesn’t work, they should fold down and close it.

            Staff are always a problem. But the same with business models, there’s no guarantee when you join a company that they will be able to maintain you and your salary in 5 years. If you are lucky, yes. Other, like myself and others that work in research, are SO lucky that we constantly change jobs every 2-3 years. And that’s the way it is.

          • Andrew says:

            It could be something as simple as temperature.

            With some cages sat next to open doors airside, the operating temperature of the cage could be between -10C and +25C. If it’s designed for circa 22C ambient that’s enough for it to expand and contract outside the limits.

        • Aston100 says:

          I reckon there are inconsistencies in the baggage gauges they use at some airports.

        • Don says:

          This is a myth. I travel by Q400 twice a week. My 53.5x38x23cm carry on fits absolutely fine. The issue is the BE sizer and what they claim is the “requirements” which are lies.

  • Guesswho2000 says:

    Took me a while to click EY meant (presumably) Ernst & Young and not Etihad.

    • Bryan says:

      Yes, shoddy journalism, expecting everybody to know what it means.

      • Rob says:

        Er, no. The firm has been called EY for many yesrs. The name Ernst & Young is dead.

      • Jonny says:

        They’re called EY now, they rebranded to the abbreviation a few years ago.

      • DV says:

        That was unnecessarily aggressive, wasn’t it? Even if you didn’t know that EY is one of the big four, doesn’t the context tell you that? Like PwC and KPMG?

    • Stuart_f says:

      Thank you!!!!

      I still hadn’t worked that out until I got to your comment. It’s probably a common abbreviation for a city person like Rob.

    • Andrew says:

      Never heard of EY?

      Do you still shop at Block & Quayle or Associated Dairies?

      It’s important not to make up names, HBOS had a few cases thrown out simply because some dim witted lawyers thought it was an abbreviation of “Halifax Bank of Scotland” when HBOS had never stood for anything different.

      • RussellH says:

        The original plan was, I believe, Bank of Scotland – Halifax, until someone pointed out that that could be made into BoSH.

        Many years ago my father had a job title that abbreviated to RSE. Those immediately below him were his two assistants…

        • Andrew says:

          I don’t recall that part, just the memo on day one that instructed everyone that HBOS wasn’t an acronym.

          For a very brief period we had a Resourcing And Performance Evaluation team.

          After threats of disciplinary action if we used the obvious acronym, it was swiftly changed to the Performance Evaluation And Resourcing team.

          • Rob says:

            I used to get the same emails when I worked for HSBC. I seem to remember, vaguely, getting similar stuff from KPMG when I was there on secondment back in 1990!

          • Fraser says:

            I liked the cheeky (British Gas?) comparison adverts which referred to “the company previously known as Electricité de France.”

            Obviously no longer used but we all know where the acryonyms come from. Seems rather redundant for firms to pretend otherwise.

      • Paul Pogba says:

        EY is a trading name, various Ernst & Young entities are still registered at Companies House.

        • The Unsavage gerbil says:

          My brother worked at Ernst and Young (as was several years ago) you don’t want to know how much management time and money went into coming up with the rebrand to EY😀

          The Gerbil

        • Lady London says:

          Indeed. I got a call last week from a recruiter for Ernst & Young. Maybe audit is using EY as a rebrand after Enron, but last week their consultancy arm was definitely being sold as Ernst & Young on the call I got.

          • Spaghetti Town says:

            wasn’t arthur anderson auditing enron? why would EY need to re-brand?

          • Spaghetti Town says:

            wasn’t arthur anderson auditing enron? why would EY need to re-brand?

          • Bagoly says:

            Even after all these years I am going to be pedantic and point out that it was Arthur Andersen – no o anywhere.

    • Peter K says:

      Even the BBC news used the name EY on the radio.

    • Lumma says:

      It’s worse on flying blogs when the commenters seem to have a competition to see who can use the most obscure airport and airline codes

      “I flew OZ KIX-GMP and credited the miles to A3 but was thinking about BR instead.

      • The Savage Squirrel says:

        When I read comments that contain IATA codes or whatever they are on here I just mentally read it as “I flew between two mystery airports”, unless it involves LHR, LGW or MAN that even my tiny squirrel brain has picked up by now :D.

        • Shoestring says:

          same here – and even then I always wonder why they didn’t write it GTW 🙂

  • TripRep says:

    I’m sure that there will be some curs but hopefully major routes will survive, especially those feeding VS flights.

    Nicola Sturgeon hasn’t commented on the Scottish dependence on FlyBE yet, maybe she’ll offer support.

    https://www.theguardian.com/business/live/2020/jan/13/flybe-rescue-talks-uk-government-gdp-growth-brexit-business-live

  • Stu N says:

    Our business uses FlyBe regularly, from a passenger point of view they have been far, far better in the second half of 2019. Punctuality has been greatly improved and cancellations are now very rare indeed. Flights have been busy too, though that doesn’t always equal profitability. It would be a shame to see them go under but it must be an extremely difficult market to operate in.

  • Aston100 says:

    If Flybe do go bust, can I simply get a refund through my credit card (Amex) under s75?

    • Charlieface says:

      Yes. You can even claim consequential loss, i.e. new tickets, and any compensation due.

      • Aston100 says:

        Thanks. In that situation, would I be obligated to try and book flights from the same UK departure airport? I ask because the other airlines are either bad departure times or have a connection in Europe first. There are better (direct) flights from other airports, but I don’t know if I would be allowed to claim for those assuming Flybe go bust.

        • Shoestring says:

          you would discuss it with the credit card co, they are likely to approve anything reasonable

        • Charlieface says:

          It’s standard EC261 rules, obvs you can’t claim the 600EUR compo, but you can claim reasonable re-routing: in your case if there isn’t anything at that airport that’s reasonable, you can get them to pay for a taxi to a different one. Also you can claim hotel and food expenses.

  • Oliv says:

    I booked a Flybe operated flight on the Air France website on an AF codeshare. Will AF have a duty of care if Flybe goes bust?

    • Yawn says:

      +1.

      I did the same recently. The flight was actually cheaper on the KLM website than on FlyBE’s own…

    • Shoestring says:

      no – the operating company bears EC/261 liability

      • Charlieface says:

        Potentially if it’s a codeshare they may have Consumer Rights Act liability, though, because they sell it as their own service.

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