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Flybe in trouble ?

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Flybe in trouble ?

Old 15th Jan 2020, 09:50
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Originally Posted by Livesinafield View Post
Its far more efficient to transport 70 people on a Q400 45 min sector than to have 70 people drive it, Like most things Tax's including APD is just that tax, a revenue generator for the treasury, serves no other purpose, when you look at it its pretty outrageous Flybe and other airlines are having to find that sort of money when aviation is challenging enough.

I'm all for protecting the environment and climate when we can, but this country is going nuts, if we continue with this path we are going to disadvantage ourselves from everyone else around the world, we will destroy our own infrastructure and economy.



BHX is one of Flybe's most profitable base's load factors there are very high and they face little to no competition


The fundamental thing here is that FlyBe is not paying the APD. It is a levy which is charged to the customer and then passed on to the treasury. They are merely tax collectors.

It remains to be seen what deal the government has done with them. But they will still want their money one way or the other. The competition will want answers as well.
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Old 15th Jan 2020, 09:59
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If the gov let Flybe go, they never get the APD they are owed. If they allow ‘easy terms’, then 2000 people keep their jobs (and dont need supporting) and the tax may be paid, one day.
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Old 15th Jan 2020, 10:03
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Don't loans (if it looks like a loan and acts like a loan...) have to be approved by the EU?

I'm sure other UK carriers would also love 100m free of interest & guarantees to tide them over the winter!
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Old 15th Jan 2020, 10:05
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Originally Posted by Livesinafield View Post
Its far more efficient to transport 70 people on a Q400 45 min sector than to have 70 people drive it, Like most things Tax's including APD is just that tax, a revenue generator for the treasury, serves no other purpose, when you look at it its pretty outrageous Flybe and other airlines are having to find that sort of money when aviation is challenging enough.

I'm all for protecting the environment and climate when we can, but this country is going nuts, if we continue with this path we are going to disadvantage ourselves from everyone else around the world, we will destroy our own infrastructure and economy.



BHX is one of Flybe's most profitable base's load factors there are very high and they face little to no competition
Indeed. Be absolutely devastating for us Norn Iron SLF living closer to City than International.
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Old 15th Jan 2020, 10:05
  #165 (permalink)  
 
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Originally Posted by Capt Scribble View Post
If the gov let Flybe go, they never get the APD they are owed. If they allow ‘easy terms’, then 2000 people keep their jobs (and dont need supporting) and the tax may be paid, one day.
This is from the same playbook as Anglo Irish Bank who got the Irish Government to give them a credit lifeline ... they lied and made themselves appear to be "too big to fail".
The Consortium are playing a blinder here. They appear to have put in practically no money, not forwarding taxes and getting somebody else to pay to keep the propellors spinning.
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Old 15th Jan 2020, 10:14
  #166 (permalink)  
 
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Originally Posted by Capt Scribble View Post
If the gov let Flybe go, they never get the APD they are owed. If they allow ‘easy terms’, then 2000 people keep their jobs (and dont need supporting) and the tax may be paid, one day.
If FlyBe DID go bankrupt HMRC would be a preferential creditor and be high up the queue for payout from resources on liquidation. I don't think the outstanding APD payment would be a significant hit to the Treasury. I don't even think it would be as great as the extra payments that would be made to workers who would be laid off either in the primary business or any dependant industry from the public purse as a result of business failure.

And none of the above has saved businesses of a similar scale in this, or other industries for a number of years. The argument from social need is also a hard one to make if one were to have to compare it to rural bus services, say, or with the funding for home to school transport.

I rather think that Govt is looking for a transitional arrangement with a solution that will enable it to claim that there has been no cost to the taxpayer (along the lines of the hamster wheel of revolving railway franchises).
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Old 15th Jan 2020, 10:15
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Originally Posted by Livesinafield View Post
..........I'm all for protecting the environment and climate when we can, but this country is going nuts, if we continue with this path we are going to disadvantage ourselves from everyone else around the world, we will destroy our own infrastructure and economy.
Yes, we have already lost Monarch and Thomas Cook.
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Old 15th Jan 2020, 10:21
  #168 (permalink)  
 
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Originally Posted by Capt Scribble View Post
If the gov let Flybe go, they never get the APD they are owed. If they allow ‘easy terms’, then 2000 people keep their jobs (and dont need supporting) and the tax may be paid, one day.
I lost my job as a result of the Thomas Cook failure. At no point did I expect the government to bail us out even though for selfish reasons it would have saved some heartache. The final bill was probably higher for the treasury than the loan required to save it. They probably lost a load of APD as well.

Nobody wants to see any airline fail. But why should one be singled out for special treatment? The competition will rightly protest that they are no longer playing on a level field. I wouldn’t be surprised if MOL commenced some sort of legal action.
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Old 15th Jan 2020, 10:27
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Originally Posted by Rt Hon Jim Hacker MP View Post
The final bill was probably higher for the treasury than the loan required to save it.
Dignified post, thank you.

The problem with loans, of course, is that they need to be paid back else they are simply gifts. Govt. APPEARS to be taking the line that the support being put in place is of that form, but public assurance is missing. Also, as their competitors point out this facility is without cost to FlyBe where they would would have to pay to raise cash in the market.
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Old 15th Jan 2020, 10:33
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When it’s all said and done, I’m pleased for all the employees of FlyBe. Let’s hope the management can come up with a viable plan to get back into profit.
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Old 15th Jan 2020, 10:36
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Better than

Why not fund them to keep 2400 working, better than giving money away to things that do not effect livelihood of families. We are all in this together so why not help the weakest. Yes Mr British Airways
you didn't think of families when you pulled out of Prestwick in 1982!
Peter
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Old 15th Jan 2020, 10:39
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Originally Posted by Perrin View Post
Why not fund them to keep 2400 working, better than giving money away to things that do not effect livelihood of families. We are all in this together so why not help the weakest. Yes Mr British Airways
you didn't think of families when you pulled out of Prestwick in 1982!
Peter
Are you looking for a Soviet style economy?
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Old 15th Jan 2020, 10:46
  #173 (permalink)  
 
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No

No I am not but we are only here once, so once in awhile help the weakest.
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Old 15th Jan 2020, 10:56
  #174 (permalink)  
 
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The Rt Hon, likewise. TCX was after £200m cash cover and ended up costing vastly more than that. However, I do not believe it was in a healthy state and think that extra money would have just kicked the can down the road. Deferring or forgoing the APD from Flybe will save the Statutory redundancy/PILON etc and possibly Allow them to restructure, and not actually ‘cost’ anything. But they have been in trouble for sometime and Something needs to change radically.
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Old 15th Jan 2020, 10:58
  #175 (permalink)  
 
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What I don't understand is how, accounting wise, FlyBe has presumably used the APD funds for purposes other than intended.

To my simple mind, the APD should have been parked on an escrow-type account, from which the funds would be transferred to the authorities at prescribed intervals. It seems, and do correct me if I'm wrong, that FlyBe has used the APD to help fund daily operations, and when time came to hand it over to the government, the coffers were empty. If that is indeed the case, the management team should be fired on the spot, prosecuted to the extent the law allows, and have their accounting handed over to an independent 3rd party, ensuring that APD funds were not used for any other purpose than intended.

Instead they're seemingly been given an reprieve on the payment, management have not been asked to step down as a prerequisite, and no legal action has been taken, nor does there seem to be any demands to restructure the company with an aim of making it a financially viable proposition.

Privatised profit, socialised deficit springs to mind.
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Old 15th Jan 2020, 11:01
  #176 (permalink)  
 
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Originally Posted by SMT Member View Post
To my simple mind, the APD should have been parked on an escrow-type account, from which the funds would be transferred to the authorities at prescribed intervals.
AFAIK, there is no legal requirement to do that.
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Old 15th Jan 2020, 11:49
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Still can't get my head around why the government got involved here and not with Thomas Cook or Monarch. Surely it just amounts to bailing out the (very wealthy) owners?

On most of the (island) routes there are alternatives to Flybe and when you factor in getting to and from airports, plus the extensive check in times, the train is almost as quick between say London and Cornwall - plus if you're on business you can actually get work done.
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Old 15th Jan 2020, 12:04
  #178 (permalink)  
 
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Originally Posted by Capt Scribble View Post
The Rt Hon, likewise. TCX was after £200m cash cover and ended up costing vastly more than that. However, I do not believe it was in a healthy state and think that extra money would have just kicked the can down the road. Deferring or forgoing the APD from Flybe will save the Statutory redundancy/PILON etc and possibly Allow them to restructure, and not actually ‘cost’ anything. But they have been in trouble for sometime and Something needs to change radically.
Yes. Maybe a respectable argument is that it is worth having a breathing space to work out how Government also needs to change policy. For example

If APD is in part a carbon tax then how does the tax structure-- long haul, short haul, domestic-- map on to the carbon costs? What needs to change both now and in the future assuming costs per tonne of carbon are set to rise substantially?

What is the value of enhanced regional connectivity both across water and long distance (Bristol-Aberdeen etc)? Where does the boundary lie between PSO and fully commercial?

If this connectivity review is an opportunity to rethink the place of inter-regional routes, then a bit of time to do that is justified. Otherwise the big risk is that we are all back here in the same place in a year's time but with bigger numbers. It's difficult to imagine market conditions strengthening in the coming year. It's not just about flybe, it's about what government wants and what the evidence is on how significant regional routes really are in the total picture.


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Old 15th Jan 2020, 12:09
  #179 (permalink)  
 
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I wouldn’t be surprised if MOL commenced some sort of legal action.
IAG have beaten him to it (via the EU - cue another good frothing from the Daily Mail mob).

Any chance they could restore our local bus service too while they're at it? I mean, what's good for Cornwall etc must be good for rural Oxfordshire.


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Old 15th Jan 2020, 12:16
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it's about what government wants and what the evidence is on how significant regional routes really are in the total picture.
I'm guessing at least another 5 years in office and a semblance of keeping to their manifesto pledges.

If FlyBe is, as reported, losing money hand over fist on these routes, then there can't really be any economic justification for keeping them going (the routes that is).
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