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| Coronavirus could be as bad for airlines as financial crisis, as Flybe fails – business live | |
| (32 minutes later) | |
| The coronavirus’s grip on the UK economy deepens as regional airline Flybe collapses, and experts fear others will follow | The coronavirus’s grip on the UK economy deepens as regional airline Flybe collapses, and experts fear others will follow |
| French contract worker Sebastien Cressent is also stranded at Birmingham Airport by Flybe’s collapse. | |
| Cressent, who doesn’t speak English, works at a local car plant. He returned his hire car to fly back home to Paris for a few days off and discovered what had happened. | |
| He’s been told the 2pm flight to Paris is full, so he might need to go to Manchester to get an evening flight to the French capital. | |
| The 10 Flybe check-in desks at Birmingham airport are deserted, following the airline’s collapse in the early hours of this morning, my colleague Joanna Partridge reports. | |
| Several people in hi-vis vests from the Civil Aviation Authority, a government surge response team and from the airport are on hand to help any passengers who have travelled to the airport, unaware of Flybe’s demise. | |
| An airport spokesperson said as many as 30 passengers had arrived at the terminal during the morning, hoping to depart for a range of domestic destinations such as Belfast, Aberdeen, Isle of Man and Jersey, as well as continental Europe. | |
| Departure screens in the terminal listing the cancelled flights inform Flybe passengers to “seek alternative arrangements”. | |
| One of those disappointed was Carole Lewis, due to fly to Inverness to visit family. She’d taken an early train to the airport from her home in Shrewsbury and hadn’t heard the news. | |
| Lewis tells us: | |
| She was hoping to be able to book a seat on a coach, but was expecting the journey to take a long time. | |
| An airport spokesperson said there have been “very positive discussions” with other airlines interested in taking on some of Flybe’s routes. | |
| Back outside Exeter Airport, Michelle Fegan, who sells pasties, sandwiches and snacks says she is devastated by Flybe’s collapse. | |
| IATA are urging governments to help airlines ‘stay afloat’ - an admission that others could follow Flybe into administration. | |
| Alexandre de Juniac, Iata’s director general, says: | |
| If IATA’s worst-case scenario comes to pass, then the airline industry is going to be in serious trouble. | |
| Here’s some reaction: | |
| NEWSFLASH: The global coronavirus outbreak could be as severe a blow to the airline industry as the global financial crisis a decade ago. | NEWSFLASH: The global coronavirus outbreak could be as severe a blow to the airline industry as the global financial crisis a decade ago. |
| That’s according to IATA, which represents the airline industry. In a new report, it warns that Covid-19 is set to cost the airline industry at least $63bn of lost revenue -- or $113bn if the virus spreads ‘extensively’ across more countries. | That’s according to IATA, which represents the airline industry. In a new report, it warns that Covid-19 is set to cost the airline industry at least $63bn of lost revenue -- or $113bn if the virus spreads ‘extensively’ across more countries. |
| IATA had previously expected a $30bn hit -- but has dramatically raised its forecast as the crisis escalates. | IATA had previously expected a $30bn hit -- but has dramatically raised its forecast as the crisis escalates. |
| Its worst-case scenario now shows a fifth of revenues being wiped out, with heavy losses in Asia, Europe and the US. That would be a severe blow to the airline sector. | Its worst-case scenario now shows a fifth of revenues being wiped out, with heavy losses in Asia, Europe and the US. That would be a severe blow to the airline sector. |
| In new analysis, IATA sees 2020 global revenue losses for the passenger business of between $63bn (in a scenario where COVID-19 is contained in current markets with over 100 cases as of 2 March) and $113bn (in a scenario with a broader spreading of COVID-19). | In new analysis, IATA sees 2020 global revenue losses for the passenger business of between $63bn (in a scenario where COVID-19 is contained in current markets with over 100 cases as of 2 March) and $113bn (in a scenario with a broader spreading of COVID-19). |
| IATA says the situation has deteriorated fast in the last fortnight. | IATA says the situation has deteriorated fast in the last fortnight. |
| IATA’s “limited” scenario is based on counties with more than 100 confirmed COVID-19 cases (as of Monday) experiencing a sharp downturn followed by a V-shaped recovery profile. This would wipe out $63bn of revenues this year. | IATA’s “limited” scenario is based on counties with more than 100 confirmed COVID-19 cases (as of Monday) experiencing a sharp downturn followed by a V-shaped recovery profile. This would wipe out $63bn of revenues this year. |
| IATA’s “extensive spread” scenario uses a similar methodology but to all markets that currently have 10 or more confirmed COVID-19 cases. The outcome is a 19% loss in worldwide passenger revenues, which equates to $113bn. | IATA’s “extensive spread” scenario uses a similar methodology but to all markets that currently have 10 or more confirmed COVID-19 cases. The outcome is a 19% loss in worldwide passenger revenues, which equates to $113bn. |
| Investment bank Goldman Sachs has warned that the coronavirus will push the UK economy to the ‘brink of recession’. | Investment bank Goldman Sachs has warned that the coronavirus will push the UK economy to the ‘brink of recession’. |
| In a new research note, Goldman say Britain faces “a substantial hit to growth in coming months. | In a new research note, Goldman say Britain faces “a substantial hit to growth in coming months. |
| It now expects the UK economy will stagnate in January-March, and contract by 0.2% in April-June. | It now expects the UK economy will stagnate in January-March, and contract by 0.2% in April-June. |
| Deutsche Bank are also anxious -- they’ve halved their forecast for British economic growth this year to just 0.5% this morning. | Deutsche Bank are also anxious -- they’ve halved their forecast for British economic growth this year to just 0.5% this morning. |
| Other travel companies are stepping in to help Flybe customers who have been stranded. | 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. | 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: | 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: | 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: | Michael Mulligan, insolvency partner at law firm Shakespeare Martineau, fears more companies will follow: |
| James Goodall, Transport & Leisure analyst at Redburn, agrees: | 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: | 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... | 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: | 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. |