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Coronavirus

Budget airline Flybe 'on brink of collapse' after failing to secure €115m loan

The struggling airline has been hit by a slump in bookings since the outbreak of the coronavirus.

THE BUDGET AIRLINE Flybe is on the brink of collapse, according to multiple media reports in the UK.

The airline was saved from collapse earlier this year but was unable to obtain a £100 million (about €115 million) loan from the British government.

People briefed on the regional carrier’s situation earlier told the Financial Times the company only has enough resources to survive “until the end of this month”.

However, BBC News is reporting that the airline is set to collapse within hours, putting 2,000 jobs at risk.

A number of flights have been cancelled, creating confusion among passengers.

A spokesperson for Flybe told TheJournal.ie they could not comment on the matter at this stage.

The airline, which is based in Exeter in England, has been hit by a slump in bookings since the outbreak of the coronavirus.

As part of a rescue deal in January, it agreed an arrangement to defer tax payments of “less than £10 million” (€11.5 million) with HM Revenue and Customs.

Ministers also agreed to hold a review into Air Passenger Duty (APD).

The structure of APD – which adds £26 (€30) to the price of most return domestic flights such as those operated by Flybe – could be altered in next week’s Budget.

Flybe serves around 170 destinations and has a major presence at UK airports such as Aberdeen, Belfast City, Manchester and Southampton. It also flies from a number of airports in Ireland. 

Series of issues 

A series of issues have affected the airline’s finances including rising fuel costs, falling demand, competition from other airlines, and a weakening of the pound.

It was bought by a consortium comprising Virgin Atlantic, Stobart Group and Cyrus Capital in February 2019, but has continued to make losses.

Rival Ryanair has predicted the drop in demand for flights due to the coronavirus will result in some European airlines failing in the coming weeks.

A British Department for Transport spokeswoman said: “We won’t comment on speculation.” Downing Street would also not comment on Flybe’s situation.

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.”

Contains reporting from PA

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