U.K.’s Flybe Airline Is Seeking Urgent Rescue Deal, Sky News Reports
U.K.’s Flybe Airline Is Seeking Urgent Rescue Deal, Sky News Reports
(Bloomberg) -- U.K. regional airline Flybe Group Plc is in crunch talks with the British government for emergency financing, less than a year after a group fronted by Virgin Atlantic Airways Ltd. stepped in to rescue the unprofitable carrier, Sky News reported.
EY is on standby to handle any potential liquidation, according to the report, which cited unidentified aviation industry sources. More than 2,000 jobs are at risk, Sky said. Flybe issued a short statement, saying it remains in business.
“Flybe continues to provide great service and connectivity for our customers while ensuring they can continue to travel as planned. We don’t comment on rumor or speculation.”
The airline’s collapse would add to the litany of failures in European aviation, which is blighted by low margins and acute competition in the short-haul market.
Tour operator Thomas Cook folded in September, in one of Britain’s highest-profile liquidations in years. Air Berlin, Germany’s second-largest carrier, and Britain’s Monarch Airlines collapsed in 2017; Iceland’s Wow Air closed down after a failed merger with Icelandair and France’s Aigle Azur also failed.
Flybe operates about 75 aircraft and serves more than 80 airports across the U.K. and Europe. Some of its routes are among the shortest in the industry. Its website offers a 130-mile service from Cardiff in southern Wales to Anglesey off the northern Welsh coast for about 20 pounds ($26).
Globally, airlines are struggling. Last month, the International Air Transport Association, which represents about 290 airlines comprising 82% of global air traffic, lowered its annual profit estimate, citing geopolitical tensions, social unrest and uncertainty around Brexit.
The trade group said European profits should improve in 2020, though the positive aggregate performance led by a handful of dominant carriers “hides a long list of airlines just breaking even or making losses” following a spate of bankruptcies in recent years.
IATA Chief Executive Officer Alexandre de Juniac told Bloomberg TV at the time that further failures couldn’t be excluded.
--With assistance from Derek Wallbank.
To contact the reporter on this story: Hailey Waller in New York at hwaller@bloomberg.net
To contact the editors responsible for this story: Chua Baizhen at bchua14@bloomberg.net, Tony Czuczka
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