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Flybe-9

Old 13th Apr 2020, 13:32
  #4041 (permalink)  
 
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I am wondering what will happen to the massive fleet of Q400s. Other large operators such as airbaltic and Eurowings/LGW are now dumping their Q400s as a result of COVID19, so there will be a massive supply of airframes for which I have difficulties seeing a tkaer in a post-COVID19-world - unless the market dries up over a longer period to an extent that routes now served with 120-150 seaters can be served with 80 seat turborops more efficiently (which I doubt). So probably they will end up as soda cans.
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Old 13th Apr 2020, 13:45
  #4042 (permalink)  
 
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unless the market dries up over a longer period to an extent that routes now served with 120-150 seaters can be served with 80 seat turborops more efficiently (which I doubt).
Why not - isn't this the Q400's sweetspot?

You would think that leasing co's will be desperate to place them.

Given the choice of a UK domestic or near Europe route restarting on a Q400, or not re-starting at all, then I think most folk who need to travel (even those who might have previously not liked flying in something that has propellers) will be pleased to have that option?
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Old 13th Apr 2020, 14:01
  #4043 (permalink)  
 
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That's why I mentioned the importance of the duration of the coming recession. As airlines would need to built up a sub-fleet of Q400s (as this is the size of aircraft almost all airlines with a diversified fleet have dumped over the past couple of years) using often fairly knackered 2nd hand examples, without some certainty about how long it will take until demand gets back to near normal I don't really see a business case.
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Old 13th Apr 2020, 20:05
  #4044 (permalink)  
 
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Originally Posted by virginblue View Post
I am wondering what will happen to the massive fleet of Q400s. Other large operators such as airbaltic and Eurowings/LGW are now dumping their Q400s as a result of COVID19, so there will be a massive supply of airframes for which I have difficulties seeing a tkaer in a post-COVID19-world - unless the market dries up over a longer period to an extent that routes now served with 120-150 seaters can be served with 80 seat turborops more efficiently (which I doubt). So probably they will end up as soda cans.
The scrap heap is my guess
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Old 13th Apr 2020, 20:15
  #4045 (permalink)  
 
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Flybe was only weeks of taking ownership of the those slots, although I believe they could only be used for European flights and not international, unless Virgin where clever and did European flights at stupid times, freeing up the slots to their advantage. I just cannot see why Virgin would want to take on Flybe at that time, why not buy it back in 2016 when it started making money again, or wait a few months for it to go bust, and then take over a limited amount of the company to reduce the risk.

Sadly Flybe was ruined by C.O.W, I know i've said it a few times, but Flybe's bottom line was thin, Saad did a good job a building reserves and making the company into a strong position, then she came in splashed the cash. To put it this way, when Saad joined, Flybe was 3 days from going bankrupt in 2013, within 18 months, he brought the company back from the brink and into profit for the first time in 6 years. Christine then took over and within 18 months, Flybe was near bankruptcy again, all it's aircraft and assets sold and being leased back, and it shareholders deceived and forced into accepting a really bad deal.

I honestly believe if Saad had stayed Flybe would still be in the air!
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Old 13th Apr 2020, 21:49
  #4046 (permalink)  
 
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So why was Saad pushed out ? Did he just upset too many people internally ?
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Old 13th Apr 2020, 22:29
  #4047 (permalink)  
 
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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.
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Old 14th Apr 2020, 09:31
  #4048 (permalink)  
 
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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.
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Old 14th Apr 2020, 11:16
  #4049 (permalink)  
 
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cabsav

Having seen it from the “inside” you are sadly spot on.
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Old 14th Apr 2020, 19:28
  #4050 (permalink)  
 
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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.
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Old 15th Apr 2020, 09:51
  #4051 (permalink)  
 
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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'.
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Old 15th Apr 2020, 10:07
  #4052 (permalink)  
 
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Originally Posted by San Expiry View Post
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?
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Old 15th Apr 2020, 10:14
  #4053 (permalink)  
 
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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.
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Old 15th Apr 2020, 10:25
  #4054 (permalink)  
 
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Originally Posted by SWBKCB View Post
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".
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Old 15th Apr 2020, 10:36
  #4055 (permalink)  
 
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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.
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Old 15th Apr 2020, 10:47
  #4056 (permalink)  
 
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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.
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Old 15th Apr 2020, 10:54
  #4057 (permalink)  
 
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Originally Posted by SWBKCB View Post
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.
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Old 15th Apr 2020, 10:58
  #4058 (permalink)  
 
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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.
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Old 15th Apr 2020, 13:25
  #4059 (permalink)  
 
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I believe Saad left of his own accord, I do know that a lot of the old Flybe board, who managed to survive the cull didn't like him. From what I heard when he joined they where arguing like children. Saad also has a history of only stay 2 or 3 years in a job before moving on, but I do think he was doing the airline good as he possibly could have done, in my professional opinion as someone who worked for the company. People may say that C.O.W took the fall for it, but she has a track record of taking over management of airlines, with them either getting into financial difficulty or going bust. Given that Flybe had only just come back into a small profit after years of losses, was it really a good idea to spend millions on the AMOS IT system, Q400 reliability, Flyshe, Targeting Loganair, Rebranding an airline that only rebranded 3 years beforehand and setting up a franchise with Eastern Airway's who have a track record of losing interest or dumping things shortly after taking them on.

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.
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Old 15th Apr 2020, 13:39
  #4060 (permalink)  
V12
 
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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.
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