Flybe-9

[davidjohnson6]

So why was Saad pushed out ? Did he just upset too many people internally ?

[JobsaGoodun]

I’m not sure Hammad’s tenure was anymore glorious in all honesty. Yes he took over in 2013 and recorded a profit in 2014 of £8.1m but in 2015 Flybe had sunk to a £35.6m loss only to record a tiny £2.7m profit in 2016. Hammad then left at the end of October 2016 with C.O.W joining in January 2017. The loss for 2017 was recorded as £19.9m but was subsequently restated in 2018 to a whopping £48.5m via an impairment.

Don’t get me wrong, I didn’t and do not rate either of them as CEO’s but I’m not sure you can blame C.O.W for this restated loss when she only joined Flybe 2mths before year end. That said, both of these CEO’s reported to the same Chairman who should surely also share the responsibility for the performance and who should never have sanctioned a crazy battle with Loganair. Worrying more about your competition than your customer will always end badly.

[cabsav]

Absolutely:
As you said crazy battle with Loganair - Idiots.
Risk and reward agreement with Eastern that apparently cost them millions - incompetents
Hopelessly misguided cabin baggage policy that saw their reputation sink further - morons.
Flights from where i am (Aberdeen) to London for less than £30 - expletive.

[ETOPS]

cabsav

Having seen it from the “inside” you are sadly spot on.

[Alteagod]

I have to agree as well you just about nailed it with your comments. From working for a GHA I would say the cabin baggage fiasco was the final straw for them. They seemed to be trying to be everything to everybody.

[San Expiry]

Complete loss of focus; worrying more (to the point of obsessive idiocy) about a cabin bag being 1cm too long but obliviously ignoring the fact that the flight is running 2 hrs late and the next one is cancelled. It's called 'priorities'.

[PDXCWL45]

Originally Posted by San Expiry

Complete loss of focus; worrying more (to the point of obsessive idiocy) about a cabin bag being 1cm too long but obliviously ignoring the fact that the flight is running 2 hrs late and the next one is cancelled. It's called 'priorities'.

The strict cabin baggage was about trying to generate cashflow because the credit card companies were keeping their income. I saw an article saying that they were owed £70 million by them. How is a business supposed to survive when its not receiving it's sales but it's still expected to provide the product purchased by the customer?

[SWBKCB]

Perhaps sort out why the CC companies are holding back as a priority? Doubt it was done for no reason. And wouldn't most people who had to pay the extra baggage chargedo it on a credit card?

Clearly the issue with the cabin baggage was that a policy was introduced but then not enforced, and then the approach was changed without being explained properly - sloppy.

[gojmc]

Originally Posted by SWBKCB

Perhaps sort out why the CC companies are holding back as a priority? Doubt it was done for no reason. And wouldn't most people who had to pay the extra baggage chargedo it on a credit card?

Clearly the issue with the cabin baggage was that a policy was introduced but then not enforced, and then the approach was changed without being explained properly - sloppy.

The issue with credit cards is due to the chargeback ability, the credit card companies are liable (section 75) if the journey doesn't happen. Why would they hand over money before the journey is completed if they are liable when it doesn't happen.

I believe under "normal" circumstances the credit card companies will release a % to airlines before the journey but have the ability to hold back if they have doubts about the financial performance of the airline.

Countless UK airlines have called the administrators because the credit card companies cut their cash off when the airlines "wobbled".

[JobsaGoodun]

The situation was likely made worse by the banning of credit card charge fees. When the price incentive to pay by debit card was removed, this would also have affected cash flow driving this into the hands of the card acquirers rather than directly into the business. This wasn't the cause of Flybe's demise but just another nail being added...

With the obligations on credit card companies to refund customers who don't receive their product/flight in the event that the business fails, understandably the credit card debt acquirers want to protect themselves. For those businesses in a financially strong position that present less risk, cash is released early to provide the business with working capital, but for those struggling it was just another problem to try and overcome. When Flybe entered Administration, I think the card acquirers had about £50m held back starving Flybe of working capital.

The downside is that Flybe is no more, however the upside is that many customers will reclaim their money from their credit card companies and not be out of pocket as a result of Flybe ceasing operations.

[SWBKCB]

The credit card companies were holding money back because Flybe wasn't making any money and they were concerned Flybe would go bankrupt.

Yes - and that's the key issue Flybe should have been addressing. Regaining the confidence of the CC companies. Everything else is secondary.

[JobsaGoodun]

Originally Posted by SWBKCB

Yes - and that's the key issue Flybe should have been addressing. Regaining the confidence of the CC companies. Everything else is secondary.

Do you think they weren't? I'm fairly sure it would have been all they were trying to do in the 12mths leading up to ceasing operations. I't's likely that the only way the credit card companies would have released cash would have been following a major cash injection into the business to stabilise it, however if this had been forthcoming they'd not have ceased operations.

[jamestkirk]

Why on earth have a CCO if these are the decisions and mistakes made. I heard he was a friend of COWs. Says it all really.

[V12]

COW was dire but ultimate responsibility must surely lie with the Chairman who interviewed, chose, and appointed her. I have reason to believe that capable candidates weren't even invited for interview.

[brian_dromey]

Originally Posted by airsouthwest

What also drove me mad is why nobody thought to find a way to properly utilise the E195's, given they have enough distance to fly to Spain, Malta, Finland etc surely Flybe could have found a niche route(s) that made flying them profitable or at least break even, rather than flying them on Newquay to Gatwick where they hardly made any cash.

The E195 are very difficult to make money with. Their trip costs are very similar to an A320 or 787-800, but with 50 fewer seats. I believe the maintenance on the engines is expensive and that flyBe had very expensive leases. Any plan for the E175 and E195s other than to dump them was doomed.

[JobsaGoodun]

I believe Saad left of his own accord

When Saad left, it was with immediate effect with Flybe having to continue paying him his huge salary for at least 12mths after his departure. I certainly don’t think that he left by choice.

That said, he did manage to raise significant capital to keep the business going, and also got Flybe out of the remaining E175 order. I think he was more of a short-term turnaround specialist rather than a long term leader.

[Rivet Joint]

Originally Posted by V12

COW was dire but ultimate responsibility must surely lie with the Chairman who interviewed, chose, and appointed her. I have reason to believe that capable candidates weren't even invited for interview.

Welcome to 2020 and it’s only going to get worse. Men more than anything just want an easy life, so don’t expect the tide to change anytime soon. In today’s woke society having a female in charge is the ultimate fashion statement. It’s all COW herself ever talked about, which ironically led to hundreds of women losing their jobs. Of course these people never get the backlash their contrived actions deserve. It all sounds a familiar story, someone comes in and get results, but rubs everyone up the wrong way. They then get replaced by someone who’s probably only asset is working a room and the inevitable happens.

It is often forgotten that BE had pretty much no competition on most of their routes, and for all the bashing the q400 gets, it is probably the most economical regional plane out there. The only way this ends in bankruptcy is catastrophic bad management.

[Rivet Joint]

Originally Posted by JobsaGoodun

When Saad left, it was with immediate effect with Flybe having to continue paying him his huge salary for at least 12mths after his departure. I certainly don’t think that he left by choice.

That said, he did manage to raise significant capital to keep the business going, and also got Flybe out of the remaining E175 order. I think he was more of a short-term turnaround specialist rather than a long term leader.

It’s called being put on gardening leave. Basically when a company cuts its nose off to spite it’s face just to get someone who’s face doesn’t fit out of the building regardless of the good work they might be doing (although some people are of course just plain toxic and such actions are justified). BE had clearly turned a corner under Saad, the purple colour scheme was inspired, so was the strap line faster than road or rail. We of course will never know if he could have kept up the good work but I am fairly certain he wouldn’t have spent lots of money to compete for the one man and his dog that flies to the Scottish islands or on completely diluting BEs brand with that god awful new livery. For those who do not think this was madness picture EZY swapping their bright orange for a shade of subtle peach.

[JobsaGoodun]

Or alternatively ..gardening leave is what you dish out when during said CEO’s tenure, the business records profits of £10m but losses of £55m, (later restated to upwards of £80m.)

Saad made some major accomplishments, but having been with the business throughout his time, the culture was not good. Sadly, although this subsequently improved, it still didn’t generate any improvement to the bottom line.

[cabsav]

Another clueless plan by the COO. £1k day off payments and a bonus scheme if you stayed working for flybe. Yes, normally could work but working for a regional, you generally have your personal life built around the area. So he gave money to people who probably not interested in leaving anyway. P*ssed away money the company didn't have. As an idea, they should have tried a revolutionary idea called leadership and management. And these village idiots were running the company.