For the second time in nearly as many years, beleaguered regional airline Flybe Group (AIM:FLYB) has ceased all flights and operations after entering into administration on Saturday, leaving ticketholders and cabin crew out of pocket and out of work.
Having returned to the skies less than one year earlier after entering into administration for the first time in March 2020, it seems unlikely that Flybe will be third-time lucky, as the controls get handed over to joint administrators at Interpath David Pike & Mike Pink.
"We are sad to announce that Flybe has been placed into administration,” Tweeted the company, adding: "Regretfully, Flybe has now ceased trading. All Flybe flights from and to the UK are cancelled and will not be rescheduled."
Based in Birmingham, Flybe operated flights on 21 routes to 17 destinations via a fleet of eight leased Q400 turboprop aircraft.
The collapse comes at a time of resurgence for the UK and European sector, with Ryanair Holdings PLC (LSE:RYA), easyJet plc and Wizz Air plc all showing extremely promising results in their latest earnings reports.
So where did it go wrong for Flybe?
“A tale of two very different airlines has unfolded today. Flybe staff face a painful period of adjustment following the airline’s collapse, while Ryanair results show it's flying high as pent-up demand for short-haul holidays surges,” commented Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
Streeter continued: "It seems Flybe could not jet past problems, which began piling up during the pandemic. Although the business was revived after being bought out by Thyme Opco, the largely domestic routes it operated on faced competition from other forms of transportation.
“Hybrid working means the number of business meetings has rebased at a lower level than pre-pandemic times, and with eco-focused passengers choosing the train to take the strain, when possible, regional hopper flights are clearly proving less popular.”
Where Flybe primarily accommodated business trips, Ryanair (and easyJet and Wizz Air for that matter) has tapped into what Streeter said was “pent-up demand for holidays consumers were starved of during the pandemic, with routes into a myriad of destinations on travellers wish-lists.”.
Looking back on Flybe
Once Britain’s largest regional carrier, Flybe – derived from the company’s less catchy previous name British European – first entered administration in March 2020, just as the Covid-19 pandemic was laying waste to Britain’s airline sector.
Its financial problems didn’t start there; one year prior, a joint venture comprising Stobart Group, Virgin Atlantic and the Cyrus Capital hedge fund received clearance from European regulators to take over the struggling business for £2.8mln. Corovavirus was simply the nail in the first of Flybe’s coffins.
Flybe resumed flights in April 2022, but the carrier was welcomed back to a changed regional aviation landscape.
Competitors began encroaching into Flybe’s territory during its leave of absence, specifically Loganair in the north and Aurigny in the south, both of whom were signing codeshare agreements with Blue Islands and Eastern Airways respectively.
These competitors muscled in on approximately 44% of the domestic routes vacated by Flybe in 2020, forcing Flybe to pivot to lesser-serviced regional hubs.
Evidently, there was not enough space even for a substantially downsized Flybe, causing the group to enter into administration once again on Saturday, January 28.
easyJet and Ryanair extend a lifeline
While would-be passengers have been thoroughly inconvenienced by the collapse, Flybe’s 250-strong workforce is facing the prospect of unemployment.
Thankfully, it could have come at a worse time, especially for cabin crew- easyJet has around 250 vacancies in its London bases for staff members willing to move down from Birmingham.
Ryanair has also encouraged former Flybe staff to apply for available roles, including flight crew, cabin crew, engineering, ground staff and office staff positions. “We will endeavor to get you back into employment as soon as possible,” the company stated.
Staff shortages have plagued the airline industry in recent years, with Ryanair boss Michael O’Leary taking aim at the UK government’s “bizarre” post-Brexit immigration policies which he contended contributed to last summer's mass flight cancellations.