In Depth

Coronavirus kiss of death for Flybe: what can passengers do?

Struggling airline goes into administration after government rejected appeal

Flybe has gone into administration after the coronavirus proved to be the final nail in the coffin of the struggling airline.

The carrier entered administration overnight, with all flights grounded and the business ceasing trading “with immediate effect”.

Earlier, Flybe boss Mark Anderson had sent an email to the airline’s 2,000 staff saying it was “shortly being put into administration”.

What happened?

The Exeter-based airline ran into difficulties last year and was bought by a consortium that includes Virgin Atlantic.

It narrowly avoided going bust in January, but yesterday said it had ultimately failed to overcome its “significant funding challenges”.

“Months of talks with the government failed to secure a crucial £100m loan and the deadly coronavirus slashed demand,” says the Financial Times.

The Guardian says that other airlines, led by British Airways owner IAG and Ryanair, had objected about the prospect of state aid and threatened legal action.

Unite national officer, Oliver Richardson, said: “For central government not to support and nurture this, especially as we deal with the twin uncertainties of the Covid-19 virus and the changes that will come with Brexit, is unhelpful and irresponsible.”

Anderson explained that “while our shareholders and the leadership team have worked with the government and key suppliers to try to get the funding and support needed, this has not materialised”.

He added: “The coronavirus has impacted both our shareholders and ourselves and has put additional pressure on an already difficult situation.”

In response to the collapse, Transport Secretary Grant Shapps said the government is “absolutely gutted, really”.

“We really tried to do everything we could back at the turn of the year but unfortunately though, with the situation that's developed with coronavirus, an already weak company just hasn't been able to survive,” he said.

The bankruptcy comes a week before government is due to unveil its 2020 Budget, which Flybe hoped would help bolster its precarious finances, after the previous chancellor said he would look again at levels of air passenger duty.

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What should passengers do?

Flybe’s website advises customers to “not travel to the airport” unless they have arranged an alternative flight.

The BBC says “there are no alternatives for most people other than to book another flight” and a “refund from the airline is highly unlikely”.

It adds that passengers will have to “rely on a refund from their credit or debit card provider, or possibly by claiming from their travel insurance”.

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