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Flybe blames coronavirus as collapse leaves passengers stranded – business live Flybe passengers stranded as experts fear more firms will collapse – business live
(32 minutes later)
Rolling coverage of the latest economic and financial news, including the collapse of regional airline Flybe The coronavirus’s grip on the UK economy deepens as regional airline Flybe collapses, and experts fear others will follow
Other travel companies are stepping in to help Flybe customers who have been stranded.
London North Eastern Railway (LNER) is offering free travel for stranded staff and customers on its East Coast line today.
EasyJet is offering to fly customers home free today and tomorrow, or for a small fee until the end of May:
John Cullen, business recovery partner at accountancy firm Menzies LLP, says the coronavirus outbreak made a bad situation worse at Flybe:
Michael Mulligan, insolvency partner at law firm Shakespeare Martineau, fears more companies will follow:
James Goodall, Transport & Leisure analyst at Redburn, agrees:
Labour MP Ben Bradshaw, whose constituency contains Exeter Airport, has blamed the government for not reforming Air Passenger Duty in time to help Flybe:
Flybe had hoped to persuade the government to halve APD (£26 per passenger) on domestic flights in next week’s budget. They’d been promised a review, but clearly this wasn’t enough...
The FT explains:
These are the routes which will be lost now Flybe has collapsed:These are the routes which will be lost now Flybe has collapsed:
Some of these places will have been hoping to benefit from the UK government’s “levelling up” agenda... so this is a blow to them too.Some of these places will have been hoping to benefit from the UK government’s “levelling up” agenda... so this is a blow to them too.
Other Flybe staff, such as pilot Sarah Nicol, are also coming to terms with the airline’s collapse:Other Flybe staff, such as pilot Sarah Nicol, are also coming to terms with the airline’s collapse:
The coronavirus crisis means it’s a really difficult time to be finding a new job -- several airlines are putting staff on leave. But her uncle, former Scotland rugby union player Andy Nicol, is doing his bit:The coronavirus crisis means it’s a really difficult time to be finding a new job -- several airlines are putting staff on leave. But her uncle, former Scotland rugby union player Andy Nicol, is doing his bit:
Katherine Densham, who had worked for Flybe for 13 years as cabin crew, heard in the early hours that the company had collapsed.Katherine Densham, who had worked for Flybe for 13 years as cabin crew, heard in the early hours that the company had collapsed.
She was due to fly from Exeter to London City and came to the airport – in her uniform – to check what was happening.She was due to fly from Exeter to London City and came to the airport – in her uniform – to check what was happening.
She broke down in tears and said:She broke down in tears and said:
A few passengers arrived at Exeter airport this morning, having not got the message not to turn up – or simply not knowing what else to do.A few passengers arrived at Exeter airport this morning, having not got the message not to turn up – or simply not knowing what else to do.
Among them was a man who was hoping to fly to Paris for a birthday party. Disappointed, he turned around and went home.Among them was a man who was hoping to fly to Paris for a birthday party. Disappointed, he turned around and went home.
Three young women, Abbey Fletcher, Jessica Canha and Robyn Kent, who work for a recruitment company and have been training in Bristol, were trying to get home to Jersey.Three young women, Abbey Fletcher, Jessica Canha and Robyn Kent, who work for a recruitment company and have been training in Bristol, were trying to get home to Jersey.
Fletcher said:Fletcher said:
They were among the fortunate ones. The airline Blue Islands has stepped in to put on a free flight to the Channel Islands this afternoon.They were among the fortunate ones. The airline Blue Islands has stepped in to put on a free flight to the Channel Islands this afternoon.
Canha tells us:Canha tells us:
Only one other flight is expected into Exeter today – a plane that left for Lanzarote this morning and is due back this afternoon.Only one other flight is expected into Exeter today – a plane that left for Lanzarote this morning and is due back this afternoon.
Flybe’s collapse could cost 1,400 jobs at companies which worked with the airline, as well as the 2,000+ staff directly employed, says the GMB union.Flybe’s collapse could cost 1,400 jobs at companies which worked with the airline, as well as the 2,000+ staff directly employed, says the GMB union.
Nadine Houghton, GMB National Officer says in a statement:Nadine Houghton, GMB National Officer says in a statement:
Newsflash: John Lewis’s staff are getting the smallest annual bonus since 1953, as the retailer reports a 23% slump in underlying profits for last year.Newsflash: John Lewis’s staff are getting the smallest annual bonus since 1953, as the retailer reports a 23% slump in underlying profits for last year.
Its staff, or partners, will get just 2% of their basic pay -- down from 3% last year .Its staff, or partners, will get just 2% of their basic pay -- down from 3% last year .
New chair Sharon White has warned that “these are the most challenging but exciting times in retail for a generation”... More here.New chair Sharon White has warned that “these are the most challenging but exciting times in retail for a generation”... More here.
ITV is forecasting a slump of at least 10% in advertising revenues in April as companies in the travel sector pull spend in the wake of the spread of the coronavirus.ITV is forecasting a slump of at least 10% in advertising revenues in April as companies in the travel sector pull spend in the wake of the spread of the coronavirus.
ITV’s acts as a bellwether for the wider UK TV ad market and its plummeting forecast paints a grim picture for other broadcasters.ITV’s acts as a bellwether for the wider UK TV ad market and its plummeting forecast paints a grim picture for other broadcasters.
The company is already feeling the impact of the spread of the virus, with total advertising revenue in the first quarter growing significantly slower than analysts forecast. ITV said total advertising revenue is set to grow 2% in the first quarter.The company is already feeling the impact of the spread of the virus, with total advertising revenue in the first quarter growing significantly slower than analysts forecast. ITV said total advertising revenue is set to grow 2% in the first quarter.
Analysts at Citi had expected growth of 3.3%, indicating a significant pull back by advertisers as the crisis has gathered pace.Analysts at Citi had expected growth of 3.3%, indicating a significant pull back by advertisers as the crisis has gathered pace.
Announcing its full year results on Thursday, ITV says:Announcing its full year results on Thursday, ITV says:
Flybe certainly isn’t alone.Flybe certainly isn’t alone.
Saga, the insurance and travel company for the over-50s, said this morning that it had seen an increase in holiday cancellations and a sharp drop in bookings in the wake of the coronavirus outbreak.Saga, the insurance and travel company for the over-50s, said this morning that it had seen an increase in holiday cancellations and a sharp drop in bookings in the wake of the coronavirus outbreak.
Passenger bookings at its tour operations had been down 20% from a year earlier, but have slumped even more in recent weeks, it told shareholders.Passenger bookings at its tour operations had been down 20% from a year earlier, but have slumped even more in recent weeks, it told shareholders.
Flybe’s collapse is a blow to Northern Ireland’s economy -- at a time when Brexit uncertainty is also high.Flybe’s collapse is a blow to Northern Ireland’s economy -- at a time when Brexit uncertainty is also high.
Brian Ambrose, chief executive of Belfast City Airport, hopes that rival airlines will step in to replace Flybe’s services.Brian Ambrose, chief executive of Belfast City Airport, hopes that rival airlines will step in to replace Flybe’s services.
In a statement, he says:In a statement, he says:
Colin Neill, chief executive of Hospitality Ulster, describes Flybe’s demise as “simply devastating news for Northern Ireland”, adding it will hurt its tourism sector.Colin Neill, chief executive of Hospitality Ulster, describes Flybe’s demise as “simply devastating news for Northern Ireland”, adding it will hurt its tourism sector.
The scene at Exeter Airport, Flybe’s base, is bleak this morning:
We reported yesterday that London City Airport (one of Flybe’s destinations) was worryingly quiet, as the coronavirus scared customers away.
My colleague Joanna Partridge spotted that there were as many (or as few) check-in staff as passengers:
Other airlines are suffering from the same problems as Flybe, points out our transport correspondent Gwyn Topham:
Associated Press points out that Brexit has also been a factor:
There are two ways in which coronavirus scuppered Flybe’s prospects.
1) Scores of UK companies have been telling staff to work from home, or to cancel non-essential meetings. That undermines demand for Flybe’s routes to business centres such as London, Manchester, Paris, Hannover or Geneva.
2) Rising anxiety about catching Covid-19 is hurting holiday traffic. Flybe offered flights to Milan and Verona, for example -- but demand has slumped as Italy closes its schools for two months and bans crowds from football matches.
Transport secretary Grant Shapps has said the government tried its best to save Flybe, but the impact of Covid-19 on its business was too great:
Alan Hudson of accountancy firm EY, who took control of Flybe overnight, says coronavirus put “added pressures” on the airline.
But he also points to the other problems which dragged Flybe down -- including currency volatility (a weak pound pushes up fuel costs), and general economic uncertainty:
The British Airline Pilots’ Association (Balpa) blamed Flybe’s owners and the government- not coronavirus - for Flybe’s failure.
Flybe was owned by Connect Airways – a consortium of Virgin Atlantic, Stobart Air and hedge fund Cyrus Capital.
General secretary Brian Strutton blasted them, saying:
Passengers booked with Flybe are being urged not to go to the airport this morning:
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Flybe, Europe’s largest regional airline, has collapsed into administration this morning as the economic damage caused by the ongoing coronavirus crisis escalated.
The airline ceased trading in the early hours, as administrators took control of the Exeter-based group -- which operated services to regional airports across the country.
Last-ditch crisis talks failed to secure a rescue package, in a devastating hit to the company’s 2,000 staff. It’s also a real blow to the passengers who relied on the company’s services -- leaving some stranded today -- and a stark illustration of the consequences of the Covid-19 outbreak.
One source at the airline told the PA news agency that a drop in demand caused by the coronavirus “made a difficult situation worse” for Flybe.
Flybe was already in trouble, of course. Back in January, it came extremely close to collapse before a rescue deal was announced. But it wasn’t able to secure a £100m government loan, forcing its demise.
Flybe CEO Mark Anderson has told staff that the coronavirus has put additional pressure on the company, as it slipped over the brink into administration overnight:
Anderson said Flybe’s management tried to secure support from the government and key suppliers, but without success, adding:
Flybe’s collapse will send a shiver through the travel sector. Passenger numbers are down sharply on some routes, particularly to Italy where over 100 people have died of the coronavirus.
We’ll be tracking reaction to Flybe’s collapse, and other economic consequences of the coronavirus, through the day.
The agenda
9am GMT: UK new car registration for February
1.30pm GMT: US weekly jobless figures