Flybmi collapse - Ryanair, Loganair quick to take advantage and is Brexit really to blame?

Sat, 16 Feb 2019 | ADMINISTRATION



Airlines Ryanair and Loganair are moving quickly to take advantage of the demise of Flybmi, which fell into administration on Saturday.

Flybmi, which cancelled all flights from today, ran scheduled passenger services to 24 local and European destinations, including Milan, Brussels, Hamburg and Munich. Its fleet of 17 Embraer jets carried 522,000 passengers on 29,000 flights in 2018.

Competitor RyanAir were quick to capitalise on the bad news, with the Chief Operations Officer Peter Bellew putting out a video (https://bit.ly/2GxizJE) on social media to invite job applications from ex-Flybmi staff: "At RyanAir we have a variety of jobs throughout the UK and throughout our network for pilots and engineers. We would be delighted to welcome people from Flybmi to apply over the weekend." He added in a tweet: "We will have recruitment staff at East Midlands airport on Monday."

Scotland-based Loganair is thought to be taking over several of Flyby's routes. The airline, which together with Flybmi is owned by the Airline Investments Ltd group, faced questions as to its continued viability. In response, the airline swiftly released a statement on its operational and financial situation.

Loganair Managing Director Jonathan Hinkles said:
“The two airlines are separate businesses, operating separate aircraft fleets on their own distinct route networks,” the airline said, “as such, the closure of bmi Regional – which flew Embraer Regional Jet aircraft on routes throughout 12 European countries – has no impact on Loganair’s continued operation, which predominantly uses turboprop aircraft on routes within the UK and in particular to, from and within the Scottish Highlands & Islands.”

“The same challenges that have led to flybmi ceasing operations, including uncertainty around intra-European traffic rights post-Brexit, do not impact Loganair’s business,” Loganair added.

“Loganair expects to return to profit in the current financial year, is carrying record passenger numbers on many of its routes and is in a strong financial position."

Meanwhile, City of Derry airport in Northern Ireland has been hard hit by Flybmi's collapse, as it has lost its only connection to London Stansted. Last year, council officials had warned that the airport would not be sustainable without the subsidised route.

In a statement on its website, Flybmi placed blame on Brexit uncertainty.

"It is with a heavy heart that we have made this unavoidable announcement today. The airline has faced several difficulties, including recent spikes in fuel and carbon costs, the latter arising from the EU’s recent decision to exclude UK airlines from full participation in the Emissions Trading Scheme. These issues have undermined efforts to move the airline into profit. Current trading and future prospects have also been seriously affected by the uncertainty created by the Brexit process, which has led to our inability to secure valuable flying contracts in Europe and lack of confidence around bmi’s ability to continue flying between destinations in Europe. Additionally, our situation mirrors wider difficulties in the regional airline industry which have been well documented."

"Against this background, it has become impossible for the airline’s shareholders to continue their extensive programme of funding into the business, despite investment totalling over £40m in the last six years. We sincerely regret that this course of action has become the only option open to us, but the challenges, particularly those created by Brexit, have proven to be insurmountable."

"Our employees have worked extremely hard over the last few years and we would like to thank them for their dedication to the company, as well as all our loyal customers who have flown with us over the last 6 years."

But one wonders whether this is management sidestepping the blame at an airline that has struggled with profitability since 2009. How long could they have expected to operate with load factors under 50 per cent?


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