Flybe’s chief executive today pleaded with employees not to give away details of its financial situation, as the struggling airline remained tight-lipped on reports that it is hurtling towards collapse today.
Europe’s biggest regional carrier was rocked by suggestions that it is in a fresh battle for survival on Sunday night, less than a year after a buyout by a consortium led by Virgin Atlantic. However, it has insisted that it is business as usual at the company.
Flybe, which handles half of the UK’s domestic flights outside of London, is facing mounting losses, and has suffered from weaker-than-usual demand over the winter months across the aviation industry.
Flights continued as normal today, but Flybe’s 2,400 employees received a letter from chief executive Mark Anderson, which refused to give them any further details on the company’s finances and warned them against “unhelpful and unproductive speculation”.
“I do appreciate that the headlines some of you have already read are disturbing but I want you to know that we are determined to do everything we can to make this work,” he said.
The company is trying to convince the government to give it a rescue package, as Big Four auditor EY was put on alert to handle any administration process should the airline run out of cash. Its financial difficulties come just four months on from the collapse of Thomas Cook, which the government refused to bail out. A spokesperson for the Department for Transport declined to comment.
Flybe also refused to comment on the reports, saying only that it “continues to focus on providing great service and connectivity for our customers, to ensure that they can continue to travel as planned”.
However, a spokesperson stopped short of denying the claims.
The British Airline Pilots Association reacted angrily to the news about the “secret” talks, saying the union had not been consulted. Meanwhile trade union Unite said it was seeking an “urgent meeting” with the company to understand the problems.
A consortium including Virgin Atlantic, Cyrus Capital and Stobart Group acquired Flybe’s assets in March, paying £2.8m for Flybe’s operations and another £2.2m for the parent company. It promised to inject a further £100m into the ailing airline’s turnaround plan, promising to rename it Virgin Connect this year.
Since then, neither Virgin or Flybe have released financial results for the company. However, Virgin Atlantic boss Shai Weiss told City A.M. in October that turning the struggling company around, and to “keep Flybe flying”, was still a priority.
Flybe has taken a serious hit from the falling value of the pound since the 2016 Brexit referendum. This is because a high proportion of its costs are in dollars, while most of its earnings are in sterling.
Similarly, the period of uncertainty that has struck the travel industry since the referendum has softened demand for travel in recent years.
Moreover, Flybe’s competitors have pushed it to the side in many of its traditional strongholds. It has already suffered in Bristol, where Easyjet has established itself as the major presence flying to Belfast, Edinburgh and Glasgow.
Cyrus Capital owns the largest share of a company formed to handle the assets, called Connect Airways, with 40 per cent. The other partners own 30 per cent each.