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IN DEPTH: Turbulent times for Flybe

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ALMOST a year after Flybe was bought by a consortium of Virgin Atlantic, Cyrus and Stobart Group, the airline – which operates ten routes from Jersey – is once again rumoured to be at risk of collapsing.

Sky News reported that accountancy firm EY had been put on standby to handle the potential administration of the company.

If the rumours are true, up to 2,000 jobs could be at risk. There is also concern about the impact on Jersey’s tourism sector, business links and leisure travel to key UK hubs. Media reports suggested that the UK’s Department for Transport and its Department for Business, Energy and Industrial Strategy is looking at whether it can provide any emergency funding to keep the business going.

The airline was keeping tight-lipped about the news yesterday, publishing a single post on Twitter. It said: ‘Flybe continues to provide great service and connectivity for our customers while ensuring they can continue to travel as planned.

‘We don’t comment on rumour or speculation.’

Jersey Consumer Council chairman Carl Walker said Flybe would be ‘sorely missed’ if it went, leaving Islanders with a smaller choice of air-travel options.

‘Flybe have come in for an awful lot of criticism from consumers, especially last year due to the way in which they enforced their hand-baggage policy, but they are essential for island communities,’ he said.

‘If something does go wrong our options will be significantly reduced and we will be left at the mercy of three to four airlines. They will be sorely missed if they go.’

Trouble in the skies

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The past few years have been turbulent ones for European airlines. Germany’s second-largest carrier Air Berlin went out of business in August 2017, followed in October by Britain’s Monarch Airlines, a collapse which affected around 900,000 passengers.

Denmark’s Primera Air folded in 2018 and last year saw the end for Germania, Iceland’s Wow Air, French airline Aigle Azur, Slovenia’s Adria Airways and the UK’s FlyBMI.

Also in 2019, travel operator Thomas Cook folded leaving thousands of passengers stranded worldwide, with many only discovering that their flights had been cancelled once they arrived at the airport. What followed was the UK’s biggest ever peacetime repatriation effort to rescue around 150,000 stranded customers.

History

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In January 1979, Jersey-based Intra Airways and Bournemouth’s Express Air Freight were merged to form Jersey European Airways.

Years later, Blackburn-based Jack Walker, a steel worker turned steel magnate, merged the business with UK-based Spacegrand air-taxi business and moved to Jersey.

Jack Walker Picture: Tony Pike.REF:02027863.jpg.nop. (26879478)

It soon rose to become Britain’s third-largest airline, but in May 2000 ‘Jersey’ was dropped from its name and the airline, now valued at £100 million, became ‘British European’.

Two years later, the airline was rebranded Flybe – Fly British European.

However, after some turbulent years, which included the closure of a number of its bases and the announcement that the company had accumulated £80 million in debt, the business was sold to a consortium of Virgin Atlantic, Stobart Group and Cyrus Capital Partners for £2.2 million. By comparison, one of the company’s turboprop aircraft retails for $32.3 million.

At the time, with lines of improved connectivity and a possible new route to Heathrow coming out of the soon-to-be-named Virgin Connect’s press office, it looked as if the business had turned a corner.

However, it now seems that the company’s new-found optimism could be short-lived with investors losing confidence in its success – potentially ending a Jersey legacy stretching back decades.

Passenger impact

If the business does collapse it could have significant implications for some Jersey travellers.

According to figures compiled by Visit Jersey, between January and November 2019, 31,608 passengers arrived into Jersey from Birmingham, 21,667 from Exeter and 15,381 from East Midlands – all routes solely operated by Flybe.

Blue Islands, a Flybe franchise partner – which allows the Guernsey-based company to use Flybe’s branding and website – is expected to continue running all of its scheduled services regardless of the larger airline’s position. It currently operates routes to London City, Southampton, Guernsey and Bristol.

A Blue Islands spokesperson said yesterday: ‘It is business as usual for us and for Flybe. As an independent, locally owned airline, Blue Islands remains fully committed to serving the Channel Islands and customers can continue to book all Blue Islands operated services at flybe.com.’

The JEP asked a number of airlines if they would take on any of Flybe’s routes if it was to go under.

Only Loganair – which runs seasonal services to Jersey – and Aurigny responded saying that they were unable to comment.

Flybe aircraft. Topping out of the new Air Traffic Control Tower at Jersey Airport Picture: MATTHEW HOTTON.REF:00775231.jpg.Airport gates - air side, departure gates.May2013. (26882312)

What are your rights?

Flights booked directly with the airline and not as part of a package are not protected by ATOL – the Air Travel Organiser’s Licence scheme – and customers will not be able to apply to obtain a refund.

However, any customers in this situation who booked with a credit card and not a debit card may be in luck. If the flights within a booking were worth more than £100, then the credit card should reimburse the cardholder under section 75 of the UK’s Consumer Credit Act.

If the booking was worth less than £100, but booked with a credit card, then the cardholder may be able to claim money back through the chargeback scheme.

For package holidays booked under an ATOL provider, customers should be protected. See caa.co.uk/atol-protection for full details.

Ed Taylor

By Ed Taylor
Journalist

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