LONDON: British regional airline Flybe collapsed on Thursday after a plunge in travel demand, making the long-struggling carrier one of the first big corporate casualties of the coronavirus outbreak.
The failure of an airline that connects all corners of the United Kingdom with major European destinations not only puts around 2,400 jobs at risk but could also see some airports struggle and regional economies hit.
“All flights have been grounded and the UK business has ceased trading with immediate effect,” Flybe said after the government walked away from a rescue package agreed in January.
Airlines around the world have been cancelling flights and warning of a hit to profitability after coronavirus first emerged in China, hitting flights across Asia, before it spread to Europe and beyond.
British Airways, easyJet , Virgin Atlantic, Lufthansa , Norwegian Air and United Airlines among those warning on the impact of a virus that looks set to hit the industry harder than the 2003 SARS outbreak.
Flybe’s collapse will also cause more problems for Prime Minister Boris Johnson who had promised to “level up” Britain by investing in regional transport links.
His government had agreed a rescue deal for the 41-year-old airline in January, saying it was important to maintain connections across the country for its eight million passengers. It said on Thursday there was nothing more it could do.
“We are also urgently working with industry to identify how key routes can be re-established by other airlines as soon as possible,” Transport Minister Grant Shapps said.
Flybe, the largest independent regional airline in Europe, operated between 81 airports and was owned by Virgin Atlantic, Stobart Group and Cyrus Capital.
The owners said they had plowed more than 135 million pounds ($174 million) into the business in the last 14 months, including around 25 million pounds pledged in January.
January’s rescue deal had seen the government agree to match the owners’ support for Flybe with a potential loan, a deferral of taxes and a review of local flight tax rules.
That briefly formed part of Johnson’s plan to try to boost the regions of Britain beyond London. Without Flybe though, some regional airports like Exeter, Birmingham and Southampton will have much poorer connections.
However, rival airlines complained that the state should not prop up failing companies and environmental campaigners argued any move to reduce the cost of flying did not fit with the government’s aim to cut greenhouse gas emissions.
Flybe’s 68 aircraft flew to airports including Belfast City in Northern Ireland, Jersey in the Channel Islands, Birmingham in central England and Scotland’s Inverness and provided more than half of UK domestic flights outside London.
The pilot’s union said airline staff had been betrayed by the owners and the government.
— Reuters
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