Flybe collapsed after losing up to £5 million a month, administrators for the failed regional airline have disclosed.
The delayed delivery of aircraft combined with declining travel demand led to £30 million in lost revenue for the airline which was only re-established nine months ago after the previous Flybe brand failed in early 2020.
A spokesperson for administrator Interpath Advisory said: “Since its launch, the company has had to withstand a number of additional shocks, not least of which was the late delivery of a fleet of 17 aircraft ordered from lessors.
“This had a tremendously negative impact on both the airline’s capacity and the company’s ability to remain competitive, as well as causing a significant financial loss to the business.
“Whilst the company was still in its start-up phase, the impact of these delays and reduced demand for travel led to an estimated £30 million in lost revenue and additional costs. The company was losing money at c£4-5 million per month just prior to filing.”
Based at Birmingham airport, Flybe collapsed in the early hours of Saturday morning with 2,500 passengers due to fly on the day and 75,000 forward bookings, all of which have been cancelled due to the airline entering into administration.
Just 44 members of staff out of a workforce of 321 have been retained to assist the administrators.
The airline operated eight leased Q400 turboprop aircraft on 21 routes to 17 destinations.
Joint administrator David Pike, managing director at Interpath Advisory, said: “The ‘new’ Flybe was received warmly by the industry and public alike when it launched last year, so this will be devastating news for all those who have supported the company since then, including employees, passengers, funders and the wider aviation industry.
“I particularly feel for the employees who have put so much energy into making Flybe a success since its relaunch. I also know that there will be customers who rely on Flybe’s services, including the extremely important Belfast connectivity which it provides.
“In this regard, this is real a setback in terms of the UK’s regional connectivity at a time when infrastructure and levelling up is high on the agenda.”
He added: “Unfortunately, the company had to withstand a number of shocks since its relaunch, not least of which was the late delivery of 17 aircraft which it needed for its schedule, and which has severely compromised both the airline’s capacity and its ability to remain competitive. This has driven significant financial losses and an associated cash drain for the business.
“Over the past few months, enormous efforts have been undertaken by the directors and key stakeholders to safeguard the future of the business, including undertaking a process to seek new investors and/or owners.
“Unfortunately, with the aviation sector still adjusting to the ‘new normal’ following the pandemic, it appears the time was not right for this process to reach a successful conclusion.
“Having ultimately exhausted its available capital base, and with no alternative options available, the directors have taken the difficult decision to place the company into administration.
“We do intend to preserve scaled-back elements of the operating platform for a short period such that a rescue transaction remains a possibility.
“Should any interested party want to explore reviving the airline, I’d encourage them to come forward and make contact with the utmost urgency.”