Flybe enters administration – what happens next?

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Flybe has finally collapsed tonight, after the Government refused additional requests for emergency funding.

The website went down around 10.45pm:

Flybe enters administration

And here is the official notice issued at Glasgow Airport, impounding one of their aircraft for non-payment of fees (click to enlarge):

Flybe enters administration

The last aircraft to land was due to be BE7308 from Hannover to Manchester at around 10.30pm.

If you saw my BBC TV interview on Tuesday, you will know that I mentioned Flybe when asked about airlines which I thought may collapse.  I felt a bit guilty about saying this, since I know many of the senior team there, but it was not exactly the sort of guess which required an industry expert.

The Financial Times had reported earlier that the Government had rejected the original request by the airline for a £100 million loan.  Whilst it was possible that Flybe would have benefited from changes to Air Passenger Duty in the budget next week, this may have been too little too late.  Any changes would have taken time to implement, and there is even talk of the budget being postponed in full as coronavirus is making financial planning difficult for the Government.

By the time you read this we will probably have the full picture.  The airline does not night-stop any aircraft, I believe, so all of the assets should have been back on UK soil late tonight unless any were impounded abroad.

This is not necessarily the end:

Will Virgin Atlantic buy the airline from the administrators?  (Difficult, given that it would have to resume trading at a time when no-one is booking.)

What will happen to the regional airports which are dependent on Flybe to keep operating?  Look at this list (some of these are franchised Flybe flights which will continue):

    • Anglesey – 100% Flybe 
    • Southampton – 95% Flybe
    • Belfast City – 80% Flybe
    • Exeter – 78% Flybe
    • Newquay – 66% Flybe
    • Wick – 59% Flybe
    • Jersey – 57% Flybe
    • Cardiff – 52% Flybe
    • Guernsey – 50% Flybe
    • Isle of Man – 49% Flybe

Does British Airways get back the ex-bmi Heathrow slots which it was forced to divest to Virgin Little Red and then Flybe?

Who will pick up the two routes which are operated under public subsidy?

Are the Stobart assets ring-fenced from the administration – and if not, what happens to the flights that Stobart runs under contract for Aer Lingus?

And who will fill the Hampton by Hilton Exeter Airport every night, which was only built after Flybe guaranteed to provide most of the guests via people who were at its training academy next door?!

There is, somewhere inside Flybe, a small and profitable regional airline which is not weighed down the financial and physical baggage of a history of failed expansion.

Whether Virgin Atlantic is the one to put this back together remains to be seen, but I would imagine that the profitable routes are not the ones which would provide Virgin with feed.

For the rest of the airline industry, there is no good news here.  The biggest winners from Flybe’s collapse, if the pieces are not picked up, will be the train companies and petrol stations.  In the meantime, the public will become even more paranoid about booking flight tickets.   If Norwegian follows in the next couple of weeks then there really will be a crisis of confidence.

EDIT:  We have now added a new article covering the announcements from Loganair, Eastern and Blue Islands as they pick up ex-Flybe routes.

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Comments

  1. Aston100 says:

    Amex are still telling me they won’t consider the cost difference for purchasing new flights.
    i.e. all that is covered is the flights alone.
    A bit unclear about the hotel.
    Also they wont look at section 75 yet. They say they want to dispute the charges first.
    Is all of this correct?
    I thought Shoestring and others were saying last night that consequential losses would apply, possibly including the travel to another airport and overnight hotels etc?
    Granted the flights are not for a few months – could that be why?

    • james says:

      Consequential losses like that – not entitled

      • james says:

        Also worth remembering that S75 only applies where goods and services above £100 – in a lot of cases Flybe flights (inc mine) are under £100.

        • Shoestring says:

          if S75 applies, it *does* actually cover consequential losses, which might be the higher extra cost of a replacement ticket if you get a refund, plus any other reasonable costs you need to incur to see the original contract fulfilled

          • Aston100 says:

            OK so how do I convey this to Amex?
            They’ve told me straight up that if I buy replacement flights, those won’t be treated as consequential loss.

          • Shoestring says:

            it’s a slightly tricky situation to negotiate, as you obvs want Amex onside as they will be more helpful this way

            in your position, I would go on Chat first of all & point by point make your case for this to be treated as S75 protection, needing to be confirmed as such right now

            eg
            1. I paid on xyz *credit* card (not charge card)
            2. purchases over £100 are protected by S75
            3. list a few points that S75 covers (just look up some stuff online)
            4. explain you would like to purchase a new ticket, the extra cost if you get a refund through chargeback will be £?
            5. you may need to incur further reasonable costs such as getting to a different airport, staying night in hotel etc if flight makes this necessary
            6. maybe only reasonable option for new flight date is a day later etc, so you’ll need hotel night etc, which is covered under S75
            etc

            then if you get a BS answer, ask to be transferred to a supervisor – I never had to go higher than a supervisor to get my queries resolved but there could easily be another managerial level you can get the Chat transferred to

            if no joy, ask for this to be formally documented as a complaint, they’ll probably say OK & they’ll come back in 10 days

            mention you have the option of referring this case to the Financial Ombudsman because they are not treating the case as a S75 issue and fulfilling their obligations

          • Freddy says:

            I had to specifically say I had consequential losses and wanted to claim s.75 when I had a Thomas Cook claim. They sent out a s.75 claim form which I completed with the cost of my replacement flights. Paid up eventually

          • Aston100 says:

            *Dear moderators, are you aware literally every post of mine awaits moderation checks?*

            Replying here because I can’t reply directly to comments further down this trail.

            After several attempts, Amex have finally agreed to go down the s75 route. Shocking how on multiple web chat conversations with different agents they kept avoiding s75 and kept pointing me towards some charge dispute instead.
            I literally had to keep saying “no thank you, I want to use s75 please” about 3 times in a row to the last agent before it seems I must have ticked some box somewhere and he went into s75 mode and confirmed I would receive a form in 5 working days.
            It felt as if they are deliberately trained to avoid s75 unless someone asks a set number of times.

            So my question is: I am intending to fly from a London airport and will need to leave the car in a long stay car park. How do I claim for the car park (About £150) and the fuel costs (About £40) if I haven’t already purchased those?
            Can I claim for an estimate?
            I mean I could just book the car park anyway, and hope nothing else changes between now and the summer departure date, which would allow me to put a real figure into the claim form. But what about fuel? How do I claim for that months in advance?

            Thanks again.

          • TGLoyalty says:

            Why would parking be a valid claim under s.75?

            You mention London airport. Where was your original flight from and to? If you have many months until you fly Amex May find a more reasonable alternative

          • should I proceed with booking new flights straight away or to get approval from Amex first to do that?

          • Shoestring says:

            @Aston 100 – the most important principle is to be reasonable in your claim (and obviously play it very straight/ don’t milk the situation)

            @Alex SM – I’d personally get prior approval but if it’s a S75 situation (ie satisfies S75 parameters), you could do it either way, ie claim after you have incurred the costs.

            I can’t see any credit card co giving you money upfront, they will want to see receipts.

    • mvcvz says:

      If Shoestring says it is so, then it must be true.

  2. Cuchlainn says:

    OT ( no Bits ) – Hilton Redemptions.
    OH has Amex Plat and I am her supplementary – I registered and have HH Gold status.
    Q1. It appears only 1 person per household under Amex Plat can be HH Gold at any one time…… ?
    Q2. Booking 3 rooms for 6 adults for 2 nights for DD’s graduation using only my HH Points. Presume only myself ( Gold ) and OH ( sharing my room ) are entitled to complimentary breakfast, so need to pay for additional 8 ( 2 nights x 4 pax ) breakfasts……..?

    All assistance welcomed as 6 return flights and 3 days car hire mid-July is starting to mount up ££ 😀

    • 2 diamond and 3 gold in one household, no problem

    • both my wife and i are gold via amex plat and supp. we book 1 room each when booking 2 rooms.

      can you tfer points to your wife and book 1 room in each’s name so get at least 2 of the 3 rooms with free bfast.

    • Is there no decent Hampton or other Hilton brand where breakfast would be included anyway? This would be the best value for 6 of you.

    • TGLoyalty says:

      Each supp holder can match Hilton Gold

      Book 1 room in your name and one in your wife’s and the hotel might give you all breakfast anyway. Infact email or phone them before booking and ask if they will.

  3. Shoestring says:

    Ouch: [ IATA now sees 2020 global revenue losses for the passenger business of between $63 billion (in a scenario where COVID-19 is contained in current markets with over 100 cases as of 2 March) and $113 billion (in a scenario with a broader spreading of COVID-19). No estimates are yet available for the impact on cargo operations.]

    https://www.iata.org/en/pressroom/pr/2020-03-05-01/

  4. Shoestring says:

    Flybe collapse: will coronavirus kill off more airlines? – great article in The Times, get behind paywall by googling [Flybe has been on life support for years, having been narrowly saved twice in the past 12 months alone. ]

    • marcw says:

      But cheap fares were the problem. According to management.

      • Shoestring says:

        poor cashflow because people aren’t booking and paying in advance for tickets over the next 6 month

        half empty planes but the overhead is still nearly as high as before

        failing the ‘going concern’ analysis/ judgement

    • Brighton Belle says:

      Shoestring is good but has work to do 🙂
      Full marks for Press Reader tips but I always hit the Times Paywall following his guidance. Doh, what am I doing wrong?

    • It’s an ok article, not that revealing…
      But there is another one underneath which IS interesting as it provides an insight from a well-placed industry source:

      “The fallout from the global coronavirus outbreak is likely to trigger more mergers and takeovers in the airline industry, the boss of one of the world’s largest carriers has said.
      Ben Smith, 48, chief executive of Air France-KLM, said that the drop in bookings caused by the outbreak would intensify pressure on airlines to curb capacity and consolidate.”

  5. Shoestring says:

    O/T Coronavirus – fancy that, it’s often mild:
    [Coronavirus patients are no longer all being admitted to hospital, British health officials have confirmed. Anyone confirmed to have the virus who is not seriously unwell or at risk of becoming more dangerously infected can recover at home. At least 45 people out of the 116 confirmed in the UK have already been instructed to stay in their own houses and wait for their illness to blow over. ]
    https://www.dailymail.co.uk/health/article-8079763/UK-coronavirus-patients-no-longer-admitted-hospital.html

  6. Can anyone wit experience of Amex Platinum help me out with a query on Flybe flights. My scenario is as follows:
    – flights booked by my partner via lastminute.com travelling out on easyJet (no issue) but returning on Flybe
    – no refund opportunity from lastminute.com for flight only bookings
    – paid for on my partners Amex platinum Supplementary cardholder card
    – nowhere in the lastminute.com breakdown does it show the costs of the FlyBe flights

    Is it suggested that I should seek a chargeback for a partial amount (not sure how I obtain this) and then rebook the Flybe return leg via a different airline? If so do I have to cover the difference in cost myself (as s.75 consequential losses won’t be applicable to both a charge card booking and a booking via a 3rd party agency!)

    Also is Amex Platinum travel insurance of any use here? It’s a cancelled flight Which I could interpret as meaning costs upto £x are covered per person for alternative travel. However I can’t see anything in the policy which includes a provision for airline failure but equally can’t find anything to suggest there is an exclusion for airline failure!

    Wondering if anyone has previous experience of this sort of scenario and what approaches have been successful.

    • Freddy says:

      What does last minute.com have to say about it? I’d make contact with them first. S.75 may not apply due to last-minute being classed as an intermediary and such claims will not succeed.

      How much are the easyJet flights at the minute, minus that off the total and make a chargeback for that if last-minute don’t assist

      • Lastminute,com have advised that they cannot issue a refund or any changes to the flights booked and that as this is a flight only booking I should make my own arrangements for alternative travel.

        Yes I was thinking the overall booking cost minus cost of the original easyJet outbound flight at current price would be appropriate but didn’t want to just come up with my own approach in case that invalidates the chargeback claim.

        Fairly sure that s75 won’t apply so won’t even explore that option.

        Does anyone know if Amex platinum travel insurance can kick in for claiming the cost of replacement return flights (assuming chargeback unsuccessful for a partial amount)?

  7. Elijah says:

    I feel for everyone there as I am a FA.

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