Flybe collapse was ‘predictable, the question was when’

Senior industry figures described the failure of Flybe on Saturday as “predictable”, with agents warning it was damaging to confidence in smaller carriers.

Flybe entered administration for the second time in two years with the immediate loss of 277 jobs nine months after being relaunched by hedge fund Cyrus Capital.

A senior aviation source described Flybe as “a basket case”, saying: “It’s terrible for its people, terrible for customers. But it was predictable. The only question was when.”

Alan Bowen, advisor to the Association of Atol Companies, said: “Flybe was flying half empty. I’m surprised it lasted nine months. The old Flybe flew 70 routes and lost money on 60 of them. There is no market there.”

Ryanair chief executive Michael O’Leary hit out at the CAA, claiming: “Flybe demonstrates the incompetence of the CAA. It should never have been allowed to get back in the air. It was never adequately financed.”

Transport secretary Mark Harper, speaking at the Airport Operators Association conference in London, insisted: “The CAA, the Department for Transport and the industry responded in a way that minimised disruption.”

But asked what became of the government’s Aviation Insolvency Bill, which could have allowed Flybe to continue operating while in administration, Harper said: “I don’t know off the top of my head. The legislative programme for next year hasn’t been set out.”

The bill was promised following an Airline Insolvency Review, set up after the collapse of Monarch in 2017, which reported in March 2019 and was followed by Thomas Cook’s collapse in September 2019. The government confirmed it had “paused” the bill last July and said it would only reappear “if a bill is required”. The review proposed an all-flights levy to fund consumer financial protection against airline failure.

Flybe was based at Birmingham and Belfast City and operated seven daily Heathrow services. It relaunched last April after entering administration in March 2020.

Sandra Corkin, managing director of Northern Ireland-based Oasis Travel, said: “We’re going to reconsider booking these smaller airlines because we can’t continue to be the fall guy. There is a lack of confidence [among] agents and customers.”

She said: “Before the pandemic, we took out supplier failure insurance for this sort of airline, but we’ve not been able to put in place insurance post-Covid because the prices have been too high.”

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