the times | Friday March 6 2020 2GM 19
News
Regional airports are facing a bleak
future and even closure after the
collapse of Flybe threatened to under-
mine the government’s pledge to “level
up” the economy.
The insolvency instantly wiped out
most flights at many small airports that
were reliant on Flybe’s schedule. The
airline operated 95 per cent of flights at
Southampton last year and almost
80 per cent at Belfast City and Exeter
airports.
GMB, the union whose members
include baggage handlers, security staff
and cleaners, said that Flybe’s collapse
could lead to eight airports closing.
The formal announcement that the
biggest regional carrier in Europe had
gone into administration was made at
3.30am yesterday. The final blow to Fly-
be’s fragile finances was a fall in book-
ings amid fears about coronavirus.
EY, the administrator, said that most
of Flybe’s 2,400 staff had been made
redundant and all flights were can-
celled. It left 15,000 passengers without
transport — they were told to make
their own way home.
The government turned down a re-
quest from Flybe, made in January
when it last ran into serious trouble, for
a £100 million loan backed by the Trea-
sury.
Kelly Tolhurst, the aviation minister,
said: “In a competitive market compa-
nies do fail and it is not the role of gov-
ernment to prop them up.”
Since February last year Flybe had
been owned by Connect Airways, a
consortium backed by Virgin Atlantic
and Stobart Aviation. According to
Cirium, a travel data company, Flybe
operated 52 domestic UK routes where
there was no alternative carrier. It
accounted for 40 per cent of all internal
flights.
The prime minister’s spokesman said
that the government was in “urgent
talks to get other airlines to take up the
routes”. The government will be des-
perate to find a quick replacement after
having promised during the election
campaign to “level up” the economy.
The Scottish airline Loganair said
that it was taking up 16 Flybe routes
from Aberdeen, Edinburgh, Glasgow,
Inverness and Newcastle over the next
four months.
John Strickland, an aviation consult-
ant, said it would be difficult to find a
replacement for many others, particu-
larly at a time of falling demand. He
said: “There’s going to be a massive
impact on regional airports generally.”
In January the Department for
Transport pledged to review the system
of “public service obligation” routes,
which are unprofitable but economi-
cally important flights subsidised by
the taxpayer, in response to Flybe’s
problems. It was expected to lead to an
expansion beyond the handful operat-
ed at present, including from Newquay,
Dundee and Londonderry to London.
However, The Times has been told
that the review has not even started andthat the terms of reference have yet to
be published. It means that there is little
hope of more subsidised routes soon.
The regional airports with more than
half their flights operated by Flybe last
year were Anglesey, Southampton,
Belfast City, Exeter, Newquay, Wick,
Jersey and Cardiff.
Nadine Houghton, the GMB’snational officer, urged the government
to step in with a rescue package, adding:
“These hubs are vital parts of the UK
economic infrastructure that commu-
nities and regional economies rely on.
Without them economic disparities
will widen — but now they face
closure.”
Airports denied that they were at risk
of closure. A spokesman for AGS
Airports, which owns and manages
Southampton, Aberdeen and Glasgow
airports, said: “The UK government
committed to levelling up all regions of
the UK by conducting a review of
regional connectivity. It’s vital this
work is progressed as a matter of
urgency.”
Tim Jeans, the chairman of Newquay
airport, said that talks had started with
alternative airlines and services would
be reinstated “on those routes hopeful-
ly within weeks”.
Brian Ambrose, the chief executive of
Belfast City, said: “We have interest in
all of the routes. For some of the larger
routes we have interest from multiple
airlines.”
Leading article, page 29
Big business hit in regions, page 37Train operators, airlines and coach
companies stepped in to rescue up to
15,000 passengers stranded by the col-
lapse of Flybe yesterday.
Free train travel was offered to all
passengers holding a valid Flybe book-
ing on domestic flights within the UK
up until Wednesday next week, ensur-
ing they could complete holidays or
business trips without additional ex-
pense.
Several airlines were also offering
cut-price “rescue fares” to Flybe cus-
tomers stuck overseas. Two of its most
popular routes were between Amster-
dam and Southampton and Paris and
Birmingham.
EasyJet offered £65 fares for Flybe
passengers up until the end of May,
while BA had £50 fares and Ryanair
Isle of Man base leaves
BA pensions unprotected
Patrick HoskingOffers of help for stranded thousands
had dedicated rescue tickets starting
at £17.
The move was made after the Civil
Aviation Authority confirmed that it
had not been asked by ministers to
stage a publicly-funded repatriation
mission to rescue passengers after Fly-
be went bust early yesterday. It had
chartered a fleet of planes to rescue
passengers stuck abroad when Thomas
Cook and Monarch Airlines failed in
the past 18 months.
Yesterday, passengers and staff spoke
of their disbelief at the collapse of the
airline.
Angela Thornton, from Penzance,
arrived at Exeter airport to find her
flight to Belfast to visit family had been
cancelled. Flybe had operated 80 per
cent of flights from the airport.
“I’m gutted,” she said. “Just trying not
to cry; I’m totally shocked.”Katherine Densham, a Flybe cabin
crew member, had been due to fly to
London City Airport from Exeter but
fought back tears as she described being
told “in the early hours” that the com-
pany had collapsed.
“It was quite a shock; I thought we
would be saved, but not this time,” she
said, standing in the empty airport.
David Manners arrived at Exeter yes-
terday morning to find his Flybe flight
to Paris had been cancelled.
His trip had been planned as a sur-
prise Christmas present for his wife and
he said they were “absolutely gutted”.
Mr Manners, who lives in Lyme Reg-
is, said Flybe’s collapse would also be
bad for the area.
“We use this airport quite a lot
because it’s so convenient,” he told BBC
News. “We know some of the staff very
well... I feel for them.”Graeme Paton, Will Humphries
More than 1,300 former British Air-
ways employees face uncertainty over
whether they will receive their full pen-
sions because of Flybe’s collapse.
Flybe took on responsibility for the
pension promises made to staff at BA’s
regional airline BA Connect when it
bought it in 2006, but a shortfall devel-
oped. Because the pension fund is
based on the Isle of Man, it falls outside
the jurisdiction of the UK’s pensions
lifeboat, the Pension Protection Fund.
As of September 30, 2018, the most
recent filing available, the British Re-
gional Airlines Group Pension Scheme
had a deficit by one measure of
£11.6 million. Since then falling sharemarkets and slumping gilt yields may
have widened the shortfall. Flybe had
been putting in £830,000 a year.
The scheme was closed at the time of
the Flybe takeover but retired BA Con-
nect staff and those who went on to
work at Flybe had valuable benefits
preserved. Unless the shortfall can be
completely eliminated, the scheme will
be unable to pay all the pensions prom-
ised, which have a present-day cost of
about £170 million.
British Airways confirmed that it had
no legacy responsibility for the fund,
but declined to comment further.
Staff joining Flybe since 2006 have
been put in a separate defined contribu-
tion scheme, which is expected to be
unaffected by the airline’s failure.None of Flybe’s aircraft left Exeter, where the airline is based, and most of its
2,400 staff were made redundant when it collapsed in the early hours yesterdayFlybe collapse puts airports at risk
Graeme Paton Transport Correspondent Analysis
F
lybe had been on life
support for years, and
had narrowly been saved
twice in the past 12
months (Graeme Paton
writes). It finally succumbed to
coronavirus as many passengers
cancelled flights.
The question now is will other
airlines follow?
According to Flybe’s
shareholders, £25 million had
been invested in the company
since January. But the sudden
drop in passenger numbers,
linked to the scare over Covid-19,
was too much to bear.
The International Air
Transport Association’s latest
analysis, published yesterday,
shows that airlines could lose
£87 billion this year if the virus
continues to spread, about four
times last month’s estimate.
In European countries —
including the UK — it is feared
that passenger numbers could
plunge by 24 per cent this year
and airlines will cumulatively
suffer £29 billion in losses.
Few carriers are in as
precarious a position as Flybe
was, but many are showing the
strain. British Airways, Ryanair,
Virgin Atlantic, Air France,
Lufthansa and Wizz Air have
cancelled flights because of
falling demand.
Norwegian said yesterday that
it was cancelling 22 flights
between Europe and the US.
Michael O’Leary, the Ryanair
chief executive, said in
November that Norwegian was
“doomed”, but the company has
insisted that it is well placed to
make a profit.
However, experts believe that
other carriers will go bust under
the crisis of confidence
precipitated by Covid-19. There
are rumours that Alitalia, the
Italian carrier that has been
close to collapse before, could be
the next to go.
James Goodall, a transport and
leisure analyst at the broker
Redburn, said: “Flybe’s failure
will likely be the first of many in- We expect that the demand
destruction caused by Covid-
accelerated its demise and we
believe further airline
bankruptcies should be expected
in the coming months.”
GEOFF CADDICK/AFP/GETTY IMAGES; RICHARD AUSTIN