CAA considers granting temporary operating licence to Flybe administrators

The Civil Aviation Authority (CAA) has confirmed it may grant the administrators of Flybe a temporary operating licence, the first time the regulator has done so in its history.

However, this does not mean Flybe will resume flying. The administrators have given the CAA assurances they will not undertake any aircraft operation, take bookings for flights or request payments for existing bookings.

Flybe ceased flying in the early hours of January 28 after the High Court appointed Mike Pink and David Pike of Interpath Advisory as administrators on January 27.

More: Flybe collapse was ‘predictable, the question was when’

The CAA’s official airline licensing record, published weekly, notes the administrators applied for a Temporary Operating Licence on January 28.

Travel Weekly understands the CAA is poised to grant this on the grounds that it allows the administrators to look at restructuring Flybe.

An industry source described the granting of a temporary licence as unusual but “just part of the administration process” allowing development of a restructuring proposal.

Flybe’s operating licence remains, in effect, suspended.

A CAA spokesperson confirmed: “Flybe’s administrators have applied for a temporary operator’s licence.

“If approved, it would allow the administrators to start the process of restructuring the business. The CAA has not yet made a decision on whether to grant a temporary licence.

“Flybe’s licence currently remains suspended in accordance with the undertakings given by the administrators.”

A temporary licence would be valid for up to 12 months. It means any restructured business would remain under the existing legal entity. However, were a Flybe operation to emerge from the administration, it would still be required to go through the full CAA licensing process.

It was reported at the weekend that Lufthansa and Air France-KLM are interested in acquiring part of Flybe and in talks with the administrators.

Flybe was losing up to £5 million a month prior to ceasing flying and a senior aviation source described the failure as “predictable”, saying: “The only question was when.”

The failed carrier’s only real assets are its seven pairs of slots at Heathrow and five pairs at Amsterdam Schiphol, given both airports are key hubs and capacity constrained.

However, the slots were awarded to Flybe and held by the airline rather than owned by it, which means they cannot be sold separately but only acquired as part of the business.

The Heathrow slots were previously held by former carrier British Midland (BMI) and granted to Flybe as part of the conditions imposed by competition regulators following British Airways’ acquisition of BMI in 2012.

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