Flybe collapse: From staff to refunds, what happens now?

Flybe, the UK regional airline, has gone bust for a second time – with the loss of hundreds of jobs and leaving the travel plans of tens of thousands of passengers in tatters.

The news was broken at 4am on Saturday by the Civil Aviation Authority, which is urging travellers with bookings on Flybe not to go to the airport.

Remind me of the original Flybe?

The original Flybe, which had previously been known as Jersey European and British European, had been fairly successful for several decades – when it floated on the stock exchange in 2010 it was briefly worth a quarter-of-a-billion pounds. But a combination of mismanagement and misfortune culminated in a £100m rescue bid.

After Flybe mark 1 burned through that cash in a year, it went bust in early March 2020, at the start of the Covid pandemic. More than 2,000 people lost their jobs and tens of thousands of passengers with advance bookings had their travel plans torn up.

How was the airline resurrected?

One of the partners in that failed rescue bid, Cyrus Capital, believed there was still a viable business. It bought the name from the receiver and crucially also secured valuable slots at London Heathrow. The reborn Flybe was re-established at Birmingham airport, with a big operation at Belfast City, and links from Heathrow airport to a range of UK destinations as well as Amsterdam.

The flight data specialist Cirium says Flybe was scheduled to serve 17 destinations across the UK and Europe in 2023 – with Belfast City, Birmingham and London Heathrow being the largest destinations by flights.

The airline operated seven daily flights at Heathrow, Britain’s busiest airport, to Amsterdam, Belfast, Newcastle and Newquay.

Next week Flybe was scheduled to operate 292 flights – equating to over 22,700 seats.

What went wrong?

Relatively few of those seats were sold at prices high enough to make Flybe viable. Operations restarted in April 2022. But by then rivals had moved in on the previously profitable routes, with Loganair taking the crown as the UK’s biggest regional airline, leaving little room for Flybe.

The nine months of Flybe mark 2’s existence were characterised by frequent flight cancellations and rearrangements of the route network, with late aircraft deliveries adding to the problem.

On the flights that did operate, passenger loads were often very low: I flew from Leeds Bradford to Heathrow, because it was much cheaper than the train, yet there were only a dozen paying passengers on board.

With intense competition on most of its route network, Flybe was simply not a going concern. The airline schedule analyst Sean Moulton said: “Whilst I feel sorry for the staff of the collapsed Flybe, it did seem inevitable. The Q400 aircraft had issues, the majority of the routes they operated had competition and their brand was tarnished from the collapse in 2020.

“It was all a recipe for failure.”

What’s the advice for passengers with Flybe tickets?

Do not go to the airport unless you have made arrangements for an alternative flight.

Will other operators help?

Yes. Train firm LNER is offering all Flybe customers who have had their flights cancelled “free journeys on any LNER service to their destination on 28 and 29 January”. Travellers will need to present evidence of a Flybe booking for either day.

Rival airlines are already making “rescue fares” available to enable people who have tickets for future Flybe flights.

For passengers booked to fly up to 5 February, easyJet is offering a fare of £49 for domestic routes and £79 for international routes including a 15kg hold bag on presentation their original Flybe booking reference. Travellers will need to call 0330 551 5151.

British Airways is offering one-way fares of £50 (plus taxes, fees and charges), including a checked-in bag of up to 23kg, on journeys between London Heathrow, Belfast City, Newcastle and Amsterdam. Prospective passengers must call 0344 493 0787.

Ryanair is focusing on passengers to and from Belfast from late March onwards. Rescue fares serving East Midlands, Manchester and London Stansted start at £30, for travel from Sunday 26 March.

Can I get my money back?

The Civil Aviation Authority says: “If you booked directly with Flybe and paid by credit card you may be protected under Section 75 of the Consumer Credit Act 1974 and should contact your card issuer for further information.

“Similarly, if you paid by debit or charge card you should contact your card issuer for advice as you may be able to make a claim under their chargeback rules.”

Passengers who booked through agents will need to see what they can be offered. The Civil Aviation Authority says: “They may have provided travel insurance that includes Scheduled Airline Failure cover.”

What about the staff?

This is very sad news for the several hundred people employed by Flybe – but unlike in March 2020, when we were at the start of a pandemic that would bring airlines to their knees and trigger tens of thousands of job losses, aviation is fairly bouyant at the moment and there will be plenty of demand from other airlines.

British Airways and easyJet have already invited Flybe staff to apply for jobs.

David Pike, joint administrator, said: “We will provide support to those who have been affected by redundancy, including supporting them in making claims from the Redundancy Payments Service.

“We will be helping employees obtain access to important records and information such as training records.”

Will fares increase?

Slightly, yes, on routes where Flybe provided competition – often at very low fares. Choice will also be reduced, which will be particularly pertinent at Belfast City airport. But the overall effect will be marginal, since Flybe was still a minor player.