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Flybe in crisis talks to stave off collapse, risking 2,000 jobs

·Finance and news reporter
EXETER, ENGLAND - OCTOBER 18: A aircraft operated by the airline Flybe, taxis down the runway at Exeter Airport near Exeter on October 18, 2018 in Devon, England. The value of shares in the Exeter-based airline Flybe, have fallen dramatically recently after the company issued another profit warning, blaming poor demand, a weaker pound and higher fuel costs.(Photo by Matt Cardy/Getty Images)
Accountancy firm EY has been put on standby to handle the potential administration of regional airline Flybe, according to Sky News. Photo: Matt Cardy/Getty Images

Regional airline Flybe is in the midst of talks to secure financing to prevent a collapse of the company that could risk more than 2,000 jobs, according to Sky News.

Exeter-based Flybe is one of the largest regional airlines in Europe, and handles around half of all UK domestic flights outside of London.

Accountancy firm EY has been put on standby to handle the potential administration of the group, Sky News said, citing unnamed aviation industry sources.

Noting that the government had been briefed on a potential crisis at Flybe, Sky News said that both the business and transport departments have been considering providing or facilitating emergency financing for Flybe.

Both Flybe and the government have thus far declined to comment.

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In a tweet on Sunday, Flybe said that it continued to provide “great service and connectivity for our customers while ensuring they can continue to travel as planned.”

“We don’t comment on rumour or speculation,” it said.

In February 2019, the assets and operations of the airline were sold for £2.8m to Connect Airways, an investor consortium led by Virgin Atlantic and including Southend Airport-owner Stobart and investment firm Cyrus Capital.

Citing unnamed airline insiders, Sky News suggested that the financing requirements of that deal had become “more onerous,” leaving Flybe on the brink of collapse.

Flybe currently operates around 75 aircraft across over 70 airports in the UK and Europe. Founded as Jersey European Airways in 1979, the airline carries around eight million passengers a year.

In a statement, Pilots’ union Balpa said it was appalled that the future of the airline and hundreds of jobs were being discussed in “secret” without input from employees or their representatives.

“According to reports the airline could have collapsed over the weekend which would have been devastating news,” said general secretary Brian Strutton.

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“This is an appalling state of affairs and we demand that the owners of Flybe — Virgin, Stobart and Cyrus — and the government departments involved stop hiding and talk to us about Flybe.

“We have a right to be consulted and the staff have a right to know what is going on.”

If Flybe fails to secure financing, it could prompt the second collapse of a major airline in the UK in less than six months.

Thomas Cook, the world’s oldest travel operator, collapsed into administration in September, leaving 150,000 holidaymakers stranded and putting 9,000 jobs in the UK at risk.

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