Flybe collapse raises questions about UK transport infrastructure resilience | business news


Flybe is a smaller, less significant company than it was when it first collapsed in March 2020, but a second failure in three years raises questions not only for potential owners but also for the UK’s connectivity.

Three years ago, the failure of what was then Europe’s largest regional airline was blamed on the ongoing pandemic, but the truth is that the company had been in trouble for years.

A government-brokered deal two months earlier with shareholders including Virgin and US hedge fund Cyrus Capital kept planes aloft, but ultimately they failed to defy economic gravity.

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Cyrus Capital bought the brand out of administration and resumed operations in April last year to try to do what Flybe 1.0 failed to do; Benefit from an airline dedicated to serving the nations and regions of Great Britain.

His strategy was to use regional services as a bridgehead to international travel, filling the seats on flights to and from Belfast, Birmingham and London not occupied by domestic travelers with passengers bound for the US and Europe.

A route to Amsterdam and slots at Heathrow were central to the plan, providing access to major hub airports which Flybe hoped alliances with larger airlines would follow.

With the airline industry still recovering from COVID and stiff competition from more established low-cost carriers, that plan hasn’t paid off.

Flybe was due to receive 17 new aircraft this year but delays with the new fleet limited the potential for a partnership, although Cyrus invested an estimated £50m to keep the company afloat.

That money has now run out, leaving administrators looking for a buyer willing to give the brand a third chance and Britain facing a recurring question about the resilience of its transport infrastructure.

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The airline has gone into administration less than a year after returning to the skies following an earlier collapse

This is an issue of particular concern in Northern Ireland, where Flybe was a major operator of Belfast City Airport.

In 2020, Flybe’s future was a political issue as ministers stood ready to discuss a passenger tax cut to deliver on Boris Johnson’s campaign pledge to boost the UK’s regions.

Three years later, along with Mr Johnson, the political imperative has largely moved on, but the economic imperatives remain. Transport infrastructure is a prerequisite for growth, especially when trying to share it, and breaking regional ties comes at a price.

With the railroad industry in turmoil and the train network a national embarrassment, you’d think there’s never been a better time to offer an alternative.

Flybe’s second grounding suggests otherwise.


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