Less than one year after being bought by a consortium that was led by Virgin Atlantic, Flybe is locked in crisis talks to find emergency funding to continue operations.
Stobart Air and Cyrus Capital were the other parties involved in the group that purchased Flybe in February 2019 for 1p per share in a transaction valued at £2.2 million. This included Flybe’s assets and operations, as Europe’s largest regional carrier, transporting over 8 million passengers a year.
This picture shows a Dash 8 Q400 of Flybe airline on September 24, 2019 at the airport in ... [+]
A Flybe spokesperson said: “Flybe continues to focus on providing great service and connectivity for our customers, to ensure that they can continue to travel as planned. We don’t comment on rumour or speculation.”
Flybe has been struggling to achieve profitability for several years on many U.K. routes that compete with road and rail transportation. With certain routes in the U.K. receiving government subsidies, the viability of certain routes, although important for the British economy, are being called into question.
The airline has now reportedly met with the Department for Transport to look at securing emergency funding. After the recent collapse of Thomas Cook and their airline subsidiary, this will cause great concern for labor unions.
EXETER, ENGLAND - OCTOBER 18: People pass a Flybe airline check-in sign at Exeter Airport on October ... [+]
Passenger numbers are steadily dropping on domestic and short-haul routes within Europe. Even airlines such as KLM are now encouraging passengers to use trains on shorter journeys to reduce the environmental impact from flying. The term Flygskam, which translates to “flight shame” and encourages individuals to take the train over a plane, has seemingly gained popularity with rail operators such as Deutsche Bahn reporting strong growth in passenger numbers.
With 2,000 jobs potentially at risk, Flybe continues to operate as normal. Operating a fleet of largely 80-seat regional aircraft from secondary airports, the airline competes with some of Europe's largest carriers who have also consolidated in recent years. Furthermore, with the growth of the three major airline alliances across Europe providing increased connectivity for passengers, Flybe has remained dependent on point-to-point demand from secondary and even tertiary airports. As demand has remained stagnant, Flybe has faced significant headwinds.
