FlyBe ‘could go bust within weeks’ amid coronavirus crisis

Flybe is waiting to find out whether it’s been granted a £100m loan by the government

Qin Xie
Wednesday 04 March 2020 14:47 GMT
No long-term damage from the coronavirus says leading travel agent

Flybe is said to be running out of cash due to the slump in bookings caused by the coronavirus outbreak.

The struggling airline said that it will need a decision from the government about a £100m taxpayers’ loan “in the coming days” or it will not survive until the end of the month.

The continued spread of coronavirus, also known as Covid-19, has hit airlines around the world as people stop travelling.

Thousands of flights around the world have been cancelled in response to the the spread of the virus.

Flybe was already struggling before the outbreak.

Two months ago, the government announced a £100m loan agreement, thought to be in the shape of a delay in paying Air Passenger Duty (APD) for three years, that would keep the airline going.

Its owners, Virgin Atlantic, Stobart Air and hedge fund Cyrus Capital, was also expected to inject capital into the airline to help it stay afloat as part of the deal.

A decision on the loan was due in February. But a delay has meant that it will unlikely to be made until the Budget next week.

However, Whitehall officials have revealed that the airline has not met certain requirements set out by the government, the Financial Times reports, which means it might not be able to secure the loan next week.

Those briefed on the situation say the airline only has enough money to keep going until the end of the month, according to the report.

The airline is hoping that a cut in APD in the next Budget will help it to survive, according to the FT.

Flybe currently employs over 2,000 people and is the largest regional airline in Europe, serving around 170 destinations and has a major presence at airports such as Aberdeen, Belfast City, Manchester and Southampton. It flies the most UK domestic routes between airports outside London.

Unite assistant general secretary Diana Holland, said: “The government needs to step in to keep Flybe flying. Many of Flybe’s routes are unique, the passengers who use those routes and the communities that Flybe serves must not be abandoned.”

Downing Street would not comment on Flybe’s situation but stressed the government’s commitment to regional connectivity.

The prime minister’s official spokesman, said: “We don’t comment on commercially sensitive matters. “We are firmly committed to promoting and safeguarding regional growth and connections.”

Flybe has been approached for comment.

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