Flybe will collapse 'within hours' leaving more than 2,000 jobs in peril

4 March 2020, 23:57 | Updated: 5 March 2020, 00:01

Flybe has reportedly grounded all flights as it faces collapse
Flybe has reportedly grounded all flights as it faces collapse. Picture: PA
Nick Hardinges

By Nick Hardinges

Struggling airliner Flybe has reportedly grounded all its planes and is set for collapse "within hours", putting 2,000 jobs in peril.

Flybe's final airborne flights are expected to land across the UK on Wednesday evening.

The ailing company narrowly avoided collapse in January but has struggled to recover since a drop in demand following the coronavirus outbreak.

It had been hoping for a £100 million bailout from the government after running into difficulties last year.

The BBC reported that a Flybe source had told them that "the game is up" for the airliner, but an official announcement will not be made until the last plane lands prior to midnight, and may not come until the early hours of Thursday morning.

On Wednesday evening, passengers claimed they had been turned away from flights and planes were being "impounded." However, the Exeter-based firm put this down to a "miscommunication."

A source told PA that Flybe aircraft at airports including Edinburgh are not being refuelled and engineers are being laid off.

The airliner's website is currently down with visitors being told to contact a sales support team.

After a flight at Glasgow Airport experienced disruption, Flybe said there had been confusion over the refuelling of two services to Birmingham.

A spokeswoman said: "Flybe can confirm that, following a miscommunication regarding re-fuelling this evening, two flights were delayed and that due to the crew now being out of hours, have been cancelled. Normal operations have now resumed.

"We sincerely apologise to those passengers inconvenienced by the disruption to their travel plans."

Crisis talks were held throughout the day on Wednesday to try to secure a rescue package, but no deal was agreed.

The collapse of the Exeter-based airline will threaten thousands of jobs and the future of a number of regional airports.

As part of the January rescue deal, Flybe agreed on an arrangement to defer tax payments of "less than £10 million" with HM Revenue and Customs.

The collapse of Flybe would put more than 2,000 jobs at risk
The collapse of Flybe would put more than 2,000 jobs at risk. Picture: PA

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

The structure of APD - which adds £26 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 flies the most UK domestic routes between airports outside London.

A series of issues have affected the airline's finances, including rising fuel costs, falling demand, competition from road, rail and other airlines, plus 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.

This story is being updated ...