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Coronavirus impact pushes Flybe into administration

Beleaguered regional airline Flybe has appointed administrators from EY after the strain of the coronavirus proved too great for it to sustain.

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Around 2,000 jobs are put at risk as a result of its collapse, which comes just weeks after a deal was reached with the government to allow Flybe to defer payment of some taxes in order to “ensure regional connectivity is strengthened”.

 

In January, the company was granted three months’ grace on more than £100m of air passenger duty. Airlines collect air passenger duty as part of the ticket price and pass it on to HMRC.

 

Three cabinet ministers – transport secretary Grant Shapps, business secretary Andrea Leadsom and then-chancellor Sajid Javid – signed off on the deal, which drew anger from other sections of the aviation industry.

 

Flybe was rescued in a £2.2m deal January 2019, when it was acquired by a consortium involving Virgin Atlantic and Stobart Group.

 

Alan Hudson, Joanne Robinson, Simon Edel and Lucy Winterborne of EY’s restructuring team have been appointed joint administrators of Flybe. As a result of the insolvency proceedings, Flybe has ceased to trade and is no longer able to fly or accept bookings.

 

Passengers who have a flight booked with Flybe today or in the future have been advised not to travel to their airport, unless they have booked alternative arrangements.

 

Flybe is the largest independent regional airline in Europe, carrying around eight million passengers a year between 81 airports across the UK and the rest of Europe, with over 210 routes across 15 countries.

 

Joint administrator Alan Hudson said: “Despite an agreement with the government to provide assistance to the Company, added pressures on the travel industry in the last few weeks have further deepened the severity of its financial situation. Flybe had already been impacted by rising fuel costs, currency volatility, and market uncertainty.”

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