finance

Flybe is much missed by passengers, but not irreplaceable


Flybe, I miss you. It is 15 months since I went to Birmingham airport on rumours that the UK’s biggest regional airline would not survive the night – and so it proved. At 2am on 5 March 2020, passengers with flights booked that day on Flybe were told: “Please do not travel to the airport as your flight will not be operating.”

As more than 2,000 excellent staff learnt they were losing their jobs, all future departures on the Exeter-based airline were cancelled – as were the travel plans of hundreds of thousands of passengers with forward bookings.

I started flying with the carrier when it was still Jersey European, and doing some “wet lease” work for Air France – flying passengers for the French carrier between Toulouse and Heathrow. I missed the brief interlude when it was British European, but picked up again when Flybe was conceived as a name for the “memorable URL-era”.

Peak Flybe happened in December 2010, when it went public and was briefly worth a quarter-billion pounds. Sadly, by the end of its life the market valuation was approximately zero.

A back-of-a-boarding-pass calculation is that every one of us who flew with Flybe in the last year of its life was subsidised to the tune of £20 per flight by shareholders, including Virgin Atlantic, who saw their £100m-plus investment disappear.

Another partner, Cyrus Capital, has bought the brand from the receiver and is promising to revive the airline – starting with flights linking Heathrow with Aberdeen and Edinburgh, using slots that date back to British Airways’s takeover of BMI in 2012. That would bring welcome competition for BA between London and eastern Scotland – but it is difficult to see where else a reborn Flybe might carve out a plausible market share.

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Now the aviation analyst Sean Moulton has written a blog in which he argues that the failure of Flybe has been beneficial for an airport that previously was dependent upon it: George Best Belfast City. Prior to the collapse, seven out of every 10 seats to and from the Northern Ireland airport were on Flybe – which operated four out of five flights (the discrepancy is because Flybe’s planes are smaller than BA’s airbuses).

Now, he says, Belfast City is less reliant on one carrier. Eastern Airways, BA CityFlyer and Aer Lingus Regional are all there, along with Loganair – now the UK’s biggest regional airline. And Ryanair has just returned to start European operations.

“The airport has become more resilient to external factors,” writes Mr Moulton. “If another airline collapses, the airport should be able to recover.”

In addition: “Not being reliant on just one airline allows the airport to have more room in negotiating deals with airlines.”

Conventional wisdom suggests losing a significant competitor from a market is necessarily bad for the consumer.

Yet while it is awful to see aviation professionals losing their livelihoods, the history of the airline business tells us that removing loss-making (or subsidy-dependent) carriers leads in the longer term to a healthier, more robust market where the best players are rewarded for providing good value, and expansion is the name of the game.

With the coronavirus pandemic still traumatising the aviation industry, it is too early to tell how passengers on the UK’s regional routes will fare. But the signs are positive.

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