Flybe, the airline that had recently had two close calls regarding insolvency, had its final call: the now-former largest regional carrier in Europe entered administration and has ceased trading with immediate effect on March 5, 2020.

The latest set of troubles that eventually led to the downfall of Flybe began in late-2018, when the company put itself up for sale, as losses continued to mount. A hero of the day appeared: a Virgin Atlantic-led consortium named Connect Airways, which also consisted of Stobart Aviation and Cyrus Capital Partners, a company that presented itself as an “investment adviser." The consortium purchased the regional carrier in early-2019 for a measly $3.6 million (£2.8 million).

With the European Union’s approval in July 2019, it seemed like the airline’s woes were over. That view was further strengthened when Virgin Atlantic announced that Flybe would be rebranded to Virgin Connect, essentially confirming that the purple-colored airline would become a feeder for Virgin Atlantic’s international network. For a few months, the carrier’s operations stabilized and it operated successfully for the rest of 2019 before the big rebranding was supposed to be completed in 2020.

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Starting from 2020, Flybe will now officially be known as Virgin Connect. The rebranding, which was hinted since the Connect Airways consortium purchased the regional airline, and the partnership, secured crucial growth opportunities for Virgin Atlantic.
 

However, the year began with rumors of an imminent collapse at the airline once again. Connect Airways’ executives pleaded with the newly-elected British government to provide a care package for the airline, including a $128 million (£100 million) commercial loan and possible cuts to the Air Passenger Duty (APD) tax, which was seen as detrimental to the carrier.

While the possible support package was publicly criticized by other airline executives, Connect Airways’ own CEO Mark Anderson warned British lawmakers that if the carrier were to cease operations, regional connectivity would be threatened. Local media reports indicated that while Flybe had enough capital to run until the end of March 2020, if the APD tax cut was not granted, that would be all she wrote for the regional airline.

On March 4, 2020, reports surfaced that the government would not provide the commercial loan, putting the carrier’s future at risk. A few hours later, as the last Flybe flights landed at their destinations, the company entered administration.

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Flybe is seemingly on the brink of collapse, as the British government reportedly will refuse to provide a $128 million (£100 million) loan to the regional airline. If the lawmakers decide not to cut Air Passenger Duty (APD) tax, the airline might become insolvent in the coming months, reports indicate.
 

Stobart Air to continue flying?

Connect Airways subsidiary Stobart Air seemingly continues to operate. Flightradar24.com data indicates that two aircraft, an ATR 72 registered EI-FSL and an Embraer E190 registered EI-GHK, operated flights to Glasgow (GLA) and Edinburgh, Scotland (EDI) in the early morning hours of March 5, 2020. Both flights originated from Dublin Airport (DUB).

The airline, which specializes in franchise and ACMI operations, has not indicated that Flybe’s collapse would impact its operations in any way.

Stobart Air spokesperson stated to AeroTime News its Flybe franchise services in the United Kingdom have ceased operating with immediate effect. Its franchised Aer Lingus routes continue to operate as normal.

Virgin Atlantic issued a public statement, indicating that “despite the efforts of all involved,” the impact of the breakout of the coronavirus “means that the consortium [Connect Airways – ed. note] can no longer commit to continued financial support.”

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Interesting developments concluded this week, as Flybe was on the brink of collapse. Curiously, though, with the backing of Virgin Atlantic-led consortium, this should not have happened. So, why did it and why was Flybe saved by the British government?