Flybe in trouble ?

[anothertyke]

Originally Posted by Sallyann1234

Let them take over FlyBe's routes then - ALL of them - and see if they can provide the same excellent service.

Surely there are flybe routes in different categories :

Man/Bhx to Paris for example, essentially contract flying. No Govt will want special measures for those, if they go, it is up to AF and the market what happens. Whose slots are they at CDG?

Much of the domestic network where cases of varying strength could be made for PSO, with of course no guarantee who would win the bids.

BHD--- this could be tricky. What value is placed on not having to trek out to BFS? Clearly some routes like Leeds Bradford might be PSO, but what to do with London would pose competition policy issues and airport as well as airline issues.

[Nil by mouth]

Again as a non UK resident, reading about the billions spent and wasted on the yet unfinished HS2 project to connect cities, just one of those billions would help airlines such as Flybe?
Imagine some of that government money invested in a regional airline to connect all major cities and not just London to Birmingham, Manchester and Leeds?
As usual in any business failure it's always the CEOs and senior management that walk away with huge sums of money and bonuses. If Flybe has been asset stripped then it is a disgrace.

[Ben_S]

Originally Posted by Rt Hon Jim Hacker MP

If the government do some sort of deal that helps FlyBe out of their current mess then there will be calls from all the other competitors for the same treatment.

Solving one problem will only create many others. O’Leary will go nuts as will BA, EasyJet and anyone else that offers domestic flights. And rightly so.

To comply with European law, the deferred payments would apply to all airlines, not just FlyBe.

Not sure it solves anything though, just postpones the pain for a few years when the payments become due.

[RoyHudd]

Abolish APD

Originally Posted by Rt Hon Jim Hacker MP

If we are going to get pedantic then let’s be clear about this argument. FlyBe do not pay the APD. They collect it from the customer and pass it on to HMRC. It is not their money.

Correct. Ultimately the customer pays. Or perhaps chooses not to buy a ticket due to its total price. FlyBe would certainly benefit on the domestic front with a cessation of APD. UK international carriers, including FlyBe would also become more competitive with their fare offerings on flights from the UK.

The industry has been lobbying for many years on this issue. Hopefully this unpleasant situation will end up with a positive outcome in all UK airlines' favour, and ultimately their customers, whether they are flying from or in transit through the UK.

Come on, Boris. Help the UK airlines. (Nationalisation of them would help no-one IMHO)

[ORAC]

Labour and other parties coming out against reducing/removing APD pointing out most of benefit will go to other airlines who don’t need and environmental case more important. Their line seems to be that vital routes should be subsidised - who ever flies them - and Flybe should be allowed to go to the wall if necessary with other airlines replacing them on those routes

[CEJM]

Apart from being a firm believer that the government should not be getting involved in private Ltd companies, I also don’t see a reason why the government should help.

The Connect Airways is formed by some very wealthy companies. If they were so sure that the turnaround plan would work and the future would be rosy, why do they not loan the £100+ million to Connect Airways?

Before anybody has a pot shot at me. I do feel for the staff and only know to well what they are going through at the moment. I lost my job when Monarch went under and no I am not bitter because the government didn’t bail Monarch out. As I said before, a government should not get involved in PLC’s and therefore did the right thing not to help Monarch out.

[Effluent Man]

It's a Tory government and following their longstanding economic theories of capitalism red in tooth and claw it is hard to justify subsidies. The vast majority of journeys between London and Newquay will be holiday home owners who can easily afford the fare. Where I live bus services in country areas have been cut back hugely for economic reasons. Why not subsidise them too?

[Sleepybhudda]

The government may not realise that we're running out of scheduled airlines. They don't survive. The last new one that wasn't a foreign operator with a UK AOC was BA Cityflyer (2007) and that was setup with aid from BA. Before that the last original independent was BlueIslands in the Channel Islands. All the later ones since have failed. That might indicate just how hard it is to make a profit in the airline world. The government should probably not bail out PLCs but they shouldn't put unreasonable tax and compensations rules and then hold their hands back when the Airline cant cope.

As I understood the investment in Flybe (to be Connect) was dependent on the outcome of Brexit. Because we as a country screwed that up they I'm guessing the investors wouldn't commit without a clear financial roadmap and so now Flybe is suffering.

[windypops]

Originally Posted by Compton3fox

I wonder how this will impact Blue Islands and the routes they operate for Flybe? Could they operate them as BI tomorrow for example?

I believe so. They operate under their own AOC and flight numbers and are a completely separate company that operate as a franchise. When Flybe were in trouble last time BI put out a statement saying their booking website was effectively in hibernation mode and they could make it live should Flybe no longer take bookings.

[runawayedge]

Aside from the pros and cons, and if indeed the UK government agree to a deferral of the overdue APD surely Connect Airways shareholders must be asked to indemnify whatever deferral amount is agreed.

[Wycombe]

Labour and other parties coming out against reducing/removing APD pointing out most of benefit will go to other airlines who don’t need and environmental case more important. Their line seems to be that vital routes should be subsidised - who ever flies them - and Flybe should be allowed to go to the wall if necessary with other airlines replacing them on those routes

To be fair, I suspect that the Labour MP for Exeter, Ben Bradshaw, has a different view. Hope I don't need to explain why.

The vast majority of journeys between London and Newquay will be holiday home owners who can easily afford the fare.

I call nonsense on that comment. The voxpops from Cornwall suggest very differently.

[bean]

BI don"t have enough money or aircraft to take over the Ci routes

[RoyHudd]

BALPA have campaigned for years on abolition or reduction of APD. I now read many comments which do not mirror this stance. I therefore presume that either there are few real professional pilots on these forums or the BALPA folk, who should be in the majority, are strangely muted. I suspect the former.

(As one who has regularly been lambasted by non-pilots and PPL's for myself being unqualified to contribute, I realise this website really does not conform to its title. So be it. I still enjoy it sometimes)

[DaveReidUK]

Originally Posted by FlyingStone

Q400 has better fuel economy per passenger than A320/B737?

Assuming that you mean fuel burn per seat, rather than per passenger (since Flybe are unlikely to be able to fill an A320/737), then there's probably not much difference.

[CEJM]

RoyHudd, as a long standing BALPA member I support their fight to reduce or abolish ADP. However that will not improve the financial health of Flybe.

Whichever way you look at it, ADP is a tax which is paid by the pax to the government via the airline. It is not something the airline pays to the government out of its own coffers. Even if payment of outstanding ADP is delayed until 2023 it doesn’t change the underlying cause that the current Flybe model doesn’t work.

As said before, if the Connect Airways shareholders are convinced that their turnaround plan will be successful, why don’t they stump up the cash now? It is not that the three partners can’t afford £100 million between them.

[Cheltman]

Is there a concern that discussing ADP removal will ignite the debate on fuel tax? Where the competition is trains, busses and cars where tax is paid (to various amounts). I assume that paying duty on aviation fuel for domestic flights would not help flybe?
Surely the bottom line is that the ticket revenue is below that needed to operate the airline. If the service is so essential then surely a £20 ticket increase (half the ADP) would be acceptable. I do hope a solution is found by the way to keep the operation going.

[Jonty]

There is a debate to be had around whether the Government should subsidise what it considers an essential link. Much like the Scottish Government does for the highlands and islands.

[homonculus]

Can anyone clear up what is being discussed? Is it

1 deferral of duty already paid by the taxpayer so that the operator keeps the tax paid and doesnt hand it over, or

2 amending duty going forward so it isnt collected ?

The latter would seem to be helpful as total fare prices would fall dramatically, although with high loadings that may not save them beyond any immediate cashflow crisis. The former, which was what the BBC was suggesting last night, would seem to be diverting my taxes with no guarantee to prevent more money going to management or shareholders....That was not the basis on which I paid.

[Wing Commander Fowler]

Quote - "Whichever way you look at it, ADP is a tax which is paid by the pax to the government via the airline. It is not something the airline pays to the government out of its own coffers. Even if payment of outstanding ADP is delayed until 2023 it doesn’t change the underlying cause that the current Flybe model doesn’t work."

This seems to miss out an important fact that homunculus has picked up on - without this tax the total fare reduces and the ticket becomes more attractive. That's where the clear benefit lay.

[CEJM]

Homonculus, as far as I can make out it will be both. Happy to be corrected though.

Even if APD is reduced/abolished then I am not sure ticket prices will come down. Flybe is unable to make a profit at current ticket prices so in my opinion any reduction in APD will not (or very little) be reflected in ticket prices. Instead the extra money will be used to shore up the company finances.

Sorry WCF, I disagree. If they can’t turn a profit now then taking the tax element off the ticket will not make the company anymore profitable. Even if that ticket is more attractive, the total below the line stays the same.