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Flybe in trouble ?

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Flybe in trouble ?

Old 17th Jan 2020, 07:15
  #221 (permalink)  
 
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I am not a particular fan of the UK government bailing out failing companies, both in principle and in this FlyBE case.

However I am EVEN LESS a fan of two Irish citizens trying to bully a democratically elected UK government to follow a policy which will make them richer, and which is to the detriment of UK businesses and consumers.

Anyone else think the same??
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Old 17th Jan 2020, 07:24
  #222 (permalink)  
 
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Anyone else think the same??
Yes, they should both but out and perhaps return to threatening to knee each other in the groin instead!

MOL's letter shows very little understanding of what actually might be going on.

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Old 17th Jan 2020, 07:27
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Originally Posted by KeyPilot View Post
I am not a particular fan of the UK government bailing out failing companies, both in principle and in this FlyBE case.

However I am EVEN LESS a fan of two Irish citizens trying to bully a democratically elected UK government to follow a policy which will make them richer, and which is to the detriment of UK businesses and consumers.

Anyone else think the same??
No.

The heritage of MOL and WW is irrelevant. FR and BA operate domestic UK services in the same way as FlyBe. They should all be playing by the same rules.

Do you want to extend your questionable attitude to the CEO of EasyJet as well? Heís a Swede.
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Old 17th Jan 2020, 07:35
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Originally Posted by Rt Hon Jim Hacker MP View Post
No.

The heritage of MOL and WW is irrelevant. FR and BA operate domestic UK services in the same way as FlyBe. They should all be playing by the same rules.

Do you want to extend your questionable attitude to the CEO of EasyJet as well? Heís a Swede.
You are entitled to your point of view.

As a point of fact, do FR operate any UK domestic routes other than Londonderry to/from LPL and EDI?
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Old 17th Jan 2020, 07:42
  #225 (permalink)  
 
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FR and BA operate domestic UK services in the same way as FlyBe.
Sorry but that is nonsense. They both operate very select domestic routes, BA's all very London-centric and RYR very few full stop (UK to Eire is not domestic).

Both airlines will benefit if there is a change (reduction) in APD.
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Old 17th Jan 2020, 07:56
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Originally Posted by Wycombe View Post
Sorry but that is nonsense. They both operate very select domestic routes, BA's all very London-centric and RYR very few full stop (UK to Eire is not domestic).

Both airlines will benefit if there is a change (reduction) in APD.
Regardless of routes flown, the tax treatment on UK domestic flights should be the same for any operator. EZY, BA, FlyBe, FR, Loganair etc.

FlyBe have been treated in a different way to others in that they have had their APD tax obligations deferred.

What does the racial heritage of any CEO have to do with whether a legal challenge should be heard or not?
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Old 17th Jan 2020, 08:24
  #227 (permalink)  
 
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We are talking about nationality, not race.

Is it proper for citizens of one country, to seek to influence the domestic policy of other countries?
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Old 17th Jan 2020, 08:46
  #228 (permalink)  
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I would put the questions in terms of employees of foreign companies such as Ryanair & IAG, but, yes, it's proper. They are stakeholders in UK domestic air travel.

If HMG wished to legislate for only UK-owned airlines to fly domestic routes, and thus follow every* other country in the world (counting the EU as a country for this purpose) that's fine as well.

* no idea how true that is
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Old 17th Jan 2020, 08:57
  #229 (permalink)  
 
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Originally Posted by BEagle View Post
100% correct! I was looking recently at having to travel from West Oxfordshire to Edinburgh for a 2 day conference. The options were 7 hours and 2 or 3 changes by train - or to drive to BHX and fly with flyBe - which was quicker and cheaper with the guarantee of a seat.
At the danger (certainty!) of thread creed, Beagle what's your view on Upper Heyford not having been converted for use as a civil airport? Lost opportunity for a valuable addition to SE runway capacity, or unsuitable/impractical for a range of reasons??
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Old 17th Jan 2020, 09:44
  #230 (permalink)  
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Originally Posted by Rt Hon Jim Hacker MP View Post
Regardless of routes flown, the tax treatment on UK domestic flights should be the same for any operator. EZY, BA, FlyBe, FR, Loganair etc.

FlyBe have been treated in a different way to others in that they have had their APD tax obligations deferred.
Unless anyone can prove otherwise, which would be surprising as it's illegal, the liability is at the same duty rate.

Any taxpayer, including the rival airlines, may be able to negotiate some deferment of when they pay their tax, which includes being charged interest.

So no difference there.

I'm sure Ryanair's tax collector would deal impartially with any application the airline might choose to make, including keeping the details confidential from the rest of us.

Last edited by aox; 17th Jan 2020 at 10:28.
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Old 17th Jan 2020, 10:51
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Originally Posted by Celestial18 View Post
Newquay is effectively the airport for all of Cornwall though. For those in the north of the county, Saltash and Liskeard have regular services to London taking around 3hrs 30. And lots more if you cross the Tamar to Plymouth too. Even Penzance is just 5 hrs away, not 6, though Iíll admit plane wins there for speed, even allowing for getting to the airport.

I was struck by the businessman quoted on the BBC who said he would be devastated if the Manchester to Edinburgh route folded. Well thereís a 3hr train that runs every two hours, which city centre to city centre will beat flying these days, once you factor in travel to airport, arrival at the airport no later than 45 mins before departure time (15 min security, 30 min gate closed), contingency margin, and travel into city at the other end. And less stressful and more productive too.
The supposed city centre to city centre "advantage " of rail is always overstated. Few people live near London rail termini. If you wanted to get from, say, Slough to Edinburgh by rail you are faced with a trip to Paddington and the Underground to King's Cross before getting your train to Edinburgh. It would be much quicker to fly from Heathrow. Similarly, if the devastated businessman lives near Manchester Airport, flying is much the quickest option.
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Old 17th Jan 2020, 11:02
  #232 (permalink)  
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Articles appearing in the last hour or two have Flybe saying the amount deferred is under £10 million

e.g. https://www.bbc.co.uk/news/business-51147471

​​I can't work out what all the hoohah was about, in any direction - partly why are critics going over the top, but even before that why did the airline set itself up for this publicity and reaction over what might be a relatively trivial amount and could have remained confidential like for other taxpayers.

edit: hee hee, comment just added on BBC article (not by me)

lol @ Ryanair you shouldnt be selling flights for £9.99 when you have to pay £13 tax. Increase your prices instead of taking the UK to the EU courts.

Last edited by aox; 17th Jan 2020 at 11:33.
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Old 17th Jan 2020, 12:22
  #233 (permalink)  
 
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Originally Posted by Alan Baker View Post
The supposed city centre to city centre "advantage " of rail is always overstated. Few people live near London rail termini. If you wanted to get from, say, Slough to Edinburgh by rail you are faced with a trip to Paddington and the Underground to King's Cross before getting your train to Edinburgh. It would be much quicker to fly from Heathrow. Similarly, if the devastated businessman lives near Manchester Airport, flying is much the quickest option.
It may also surprise the tireless pro-train brigade to know that very few people hold meetings in railway stations . . . and very few businesses are walking distance from said railway stations.

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Old 17th Jan 2020, 12:29
  #234 (permalink)  
 
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Originally Posted by KeyPilot View Post
We are talking about nationality, not race.

Is it proper for citizens of one country, to seek to influence the domestic policy of other countries?
Donít know, youíd better ask the likes of Alexander Lebedev or Rupert Murdoch.....

Have to say I agree with Jim Hacker on this:
Regardless of routes flown, the tax treatment on UK domestic flights should be the same for any operator. EZY, BA, FlyBe, FR, Loganair etc.


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Old 17th Jan 2020, 14:56
  #235 (permalink)  
 
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Have to say I agree with Jim Hacker on this:
Quote:
Regardless of routes flown, the tax treatment on UK domestic flights should be the same for any operator. EZY, BA, FlyBe, FR, Loganair etc.
Yes of course it should, and they all stand to benefit if there is a favourable change to APD.

Jim's assertion that the likes of BA and RYR face the same challenges on regional routes as Flybe do was what I disagreed with.
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Old 17th Jan 2020, 15:33
  #236 (permalink)  
 
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I can't work out what all the hoohah was about, in any direction
I agree - all very odd. To be honest deferring £10m is nowt, must be more to it. This from Theo Leggett on the BBC website:
Three days after the government trumpeted its deal with Flybe's shareholders to keep the airline operating, it's still far from clear what has actually been agreed.

We know that shareholders plan to make up to £30m available and £9m will come from Stobart Group, with the funds "drawn down only if required". It's not clear how much Cyrus Capital and Virgin Atlantic will each provide.

We know that the Flybe is talking to the government about a loan, because chief executive Mark Anderson has said so. He told employees it would be "a commercial loan … the same as any loan we'd take from any bank".

And Flybe says it has agreed a plan with HMRC to delay payment of a debt "of less than £10m" for a few months.

But many questions remain.

For example, if the government loan is going to be on commercial terms, why not just go to a bank?

If the shareholders are willing to pump in up to £30m, why does Flybe need to delay paying its debts to HMRC?

With a full blown row raging over whether or not the package involves state aid, and whether the government should actually be encouraging regional air transport at all, it seems transparency is in very short supply.
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Old 17th Jan 2020, 15:34
  #237 (permalink)  
 
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Originally Posted by fergusd View Post
It may also surprise the tireless pro-train brigade to know that very few people hold meetings in railway stations . . . and very few businesses are walking distance from said railway stations.
Edinburgh's main conference and financial centre is a few minutes walk from Haymarket station. Hence the rapid rise in passengers there, and the fall in use of the plane. The train service from Manchester has been a mess recently, but when all the new trains are in use, I wouldn't be surprised if the EDI service stops, as the Glasgow service already has.
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Old 17th Jan 2020, 22:27
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For example, if the government loan is going to be on commercial terms, why not just go to a bank?
This needs to be secured onto something, and would require strict financial assessment... its the equivalent of you going to Lloyds and trying to borrow 50K to pay of some of your mortgage while your on the edge of bankruptcy...
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Old 19th Jan 2020, 11:44
  #239 (permalink)  
 
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I watched with astonishment a discussion on BBC Southwest this morning about Flybe; 3 or 4 so-called experts, each with an agenda. None of them, nor the presenter, appeared to understand that Flybe is a conglomerate of several businesses, including, of course, the Engineering.

Ever since being closely involved with persuading Jack Walker to merge his 2 airline acquisitions into one, based at Exeter, in the 1980s I have watched with despair successive CEOs/Board of Directors screw JEA/Flybe up, as they massaged their own ambitions.

Not one of the "experts" this morning mentioned the self-evident truth that Flybe's problems stem from this dreadful management over the last decade, or even further back to the unlamented Jim French. A series of ridiculous decisions that had a lot more to do with management egos than common sense, eg acquiring a much larger, failing, airline and fleet in the childish belief that it could be absorbed painlessly into the company. That went well, didn't it.

Of course taxpayers' money should not be used to get the current owners out of the financial mess they bought in to/created. But there is a "national interest" case for financial support for routes that contribute to regional economies by providing connections between regional centres and between them and hub airports.

If Flybe were to be slimmed down to what it does best, regional scheduled services on routes where the Dash 8 is economic, forget the "me-too" leisure routes aimed at competing pointlessly and hopelessly with Easyjet, Jet2, and Ryanair, and lose the jets acquired for that purpose, it could be a viable operation, with the engineering as a profitable contributor. It would need financial support initially, from the taxpayer.

But to do that with taxpayers' funds without the present owners getting one penny of benefit means that the Government must do what it did with the banks; acquire ownership as a condition of the support, then slim it down to a profitable regional airline with only the Dash 8s, and then sell its shares back to the public when they have a value, to get the taxpayers' money back.

This is a well-tried model and it works. But will BoJo's team have the nous, experience or ability to carry it off? NO. What a pity.

Last edited by old,not bold; 19th Jan 2020 at 11:54.
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Old 19th Jan 2020, 13:32
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Originally Posted by old,not bold View Post
I watched with astonishment a discussion on BBC Southwest this morning about Flybe; 3 or 4 so-called experts, each with an agenda. None of them, nor the presenter, appeared to understand that Flybe is a conglomerate of several businesses, including, of course, the Engineering.

Ever since being closely involved with persuading Jack Walker to merge his 2 airline acquisitions into one, based at Exeter, in the 1980s I have watched with despair successive CEOs/Board of Directors screw JEA/Flybe up, as they massaged their own ambitions.

Not one of the "experts" this morning mentioned the self-evident truth that Flybe's problems stem from this dreadful management over the last decade, or even further back to the unlamented Jim French. A series of ridiculous decisions that had a lot more to do with management egos than common sense, eg acquiring a much larger, failing, airline and fleet in the childish belief that it could be absorbed painlessly into the company. That went well, didn't it.

Of course taxpayers' money should not be used to get the current owners out of the financial mess they bought in to/created. But there is a "national interest" case for financial support for routes that contribute to regional economies by providing connections between regional centres and between them and hub airports.

If Flybe were to be slimmed down to what it does best, regional scheduled services on routes where the Dash 8 is economic, forget the "me-too" leisure routes aimed at competing pointlessly and hopelessly with Easyjet, Jet2, and Ryanair, and lose the jets acquired for that purpose, it could be a viable operation, with the engineering as a profitable contributor. It would need financial support initially, from the taxpayer.

But to do that with taxpayers' funds without the present owners getting one penny of benefit means that the Government must do what it did with the banks; acquire ownership as a condition of the support, then slim it down to a profitable regional airline with only the Dash 8s, and then sell its shares back to the public when they have a value, to get the taxpayers' money back.

This is a well-tried model and it works. But will BoJo's team have the nous, experience or ability to carry it off? NO. What a pity.
The number of "regional" routes that can justify double daily Dash-8 and not be pounced on once the traffic is up and running by a loco runnng a 737/319/320 are very limited. Unfortunately economics in the airline business is now in the far right sector of the product life cycle curve - everthing tends to the lowest cost, most efficient and in the airline business that is 737/320. if you can get enough to run a dash-8 profitably, you can run a 737/320 picking up premium flexible fare-payers for the business element with the £25 each way fill ups generating student, VFR and other business traffic that is less time sensitive. The price elasticity of demand at £25 one-way is quite high, generating a lot of traffic that even £50 one way won't.

Go on a loco Mondy morning and see the electricians/plasterers/roofers etc. heading somewhere for a week's or even a day's work. They wouldn't be there at Flybe Dash-8 prices. Companies no longer need regional offices if there is a direct flight for an installation/repair engineer
I can do Bristol to BFS on easy for £60 return, look at Flybe Birmingham/BHD and it used to be 3x that price. Today it is £30 each way. Was that bad pricing/marketing, wrong aeroplane or the wrong business model? Easyjet (and others) have designed their business to be low cost - everything is low cost. Put on a flight, market it, get load factor at 95% and see if the yield comes up to make it worthwhile. If not move the asset somewhere else. That is 21st Century short-haul in a nutshell. If the government wants to support regions, then have government owned airports, free landing fees and maybe subsidise route start-ups for a year. How to make a small fortune? Start with a big fortune an buy an airline.

The previous management of Flybe got their strategy wrong and also didn't build in any get-out option (i.e. breaking leases on the wrong aeroplanes). I feel for the staff but there are only two options;
The current owners weather the strategic setup until they can change it; I don't know the detail of the leases/end-dates etc. so I have no idea how long this is. But they have just got 4 slots at LHR which must be worth several £millions (by moving NQY to LGW).
It goes bust and someone starts again (pre-pack insolvency, not likely now that a deal has been done with the government).
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