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bennett123
Topic Author
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Re: Flybe News and Discussion Thread

Tue Jan 14, 2020 1:03 pm

Clearly their network is not currently viable.

Given the extent of the mess, it is

likely that a large number of routes are loss making.

Perhaps prices are too low.

At the end of the day, what is being requested is a 3 year loan. Is there any evidence that after 3 years another loan will be required.

I also have doubts about how the Consortium took over BE without realising all of this.
 
bennett123
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Re: Flybe News and Discussion Thread

Tue Jan 14, 2020 1:05 pm

FluidFlow

Perhaps people should have a choice.

Just read your post again, they do have a choice already.
 
eire123
Posts: 48
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Re: Flybe News and Discussion Thread

Tue Jan 14, 2020 1:07 pm

If flybe goes under the knock-on effect will ripple. For instance Belfast City Aiport (BHD) where Flybe are the biggest operator out of would certainly face the certain prospect of closure, with only EI and BA left operating out of there I doubt it would be enough for them to sustain. Especially when BHD admitted that they nearly faced closure when FR pulled out of there several years back and then they only operated a fraction of the routes FlyBe offered from BHD. Easyjet would certainly easily and very quickly pickup the slack out of BFS to the rest of the UK regions where they compete on about 50% or more of the routes.

AMENDMENT: Belfast City - Flybe accounts for almost 80% of flights in and out of there.. https://www.bbc.co.uk/news/business-51100029
Last edited by eire123 on Tue Jan 14, 2020 1:22 pm, edited 1 time in total.
 
FluidFlow
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Re: Flybe News and Discussion Thread

Tue Jan 14, 2020 1:15 pm

bennett123 wrote:
FluidFlow

Perhaps people should have a choice.

Just read your post again, they do have a choice already.


A private corporation does not need to provide a choice to anyone. Therefore if said private company is worried about the bad image its core business has due to the impact on the environment it can decide to reduce this impact. Instead of reducing the impact of the core business and therefore the actual core business it could reduce the impact by doing it with other means, for example by not buying and providing meat.

This is not a ban on meat, airlines can just stop to provide it and reduce their carbon foot print.
 
sandyb123
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Re: Flybe News and Discussion Thread

Tue Jan 14, 2020 2:12 pm

So the Uk gov has batted the ball back I got the owners court. They expect a fundraiser from either share issue or investment before they are swilling to consider writing off / postponing APD.

The clock is ticking....

Sandyb123
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OA260
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Re: Flybe News and Discussion Thread

Tue Jan 14, 2020 2:13 pm

BlueTrue wrote:
Those of you who think that the loss of Flybe would be serious for Belfast should have a look at the Easyjet network out of Belfast. Have you? Every major route covered.


14 routes out of BHD would be a huge loss. I guess you have little knowledge about the reality on the ground in NI and why both BFS and BHD are successful airports despite being so close together. Unless EZY are going to take over all 14 routes out of BHD then I find it hard to see your point.
 
eire123
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Re: Flybe News and Discussion Thread

Tue Jan 14, 2020 3:42 pm

OA260 wrote:
BlueTrue wrote:
Those of you who think that the loss of Flybe would be serious for Belfast should have a look at the Easyjet network out of Belfast. Have you? Every major route covered.


14 routes out of BHD would be a huge loss. I guess you have little knowledge about the reality on the ground in NI and why both BFS and BHD are successful airports despite being so close together. Unless EZY are going to take over all 14 routes out of BHD then I find it hard to see your point.


Yes, but then the consumer loses out with the lack of competition. EZY have a near monopoly out of BFS especially since FR have dwindled their operations. Although would there be a potential for Aer Lingus regional to expand out of BHD in the event Flybe fold? Especially on the lucrative BHD - LCY route
 
BlueTrue
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Re: Flybe News and Discussion Thread

Tue Jan 14, 2020 4:00 pm

You know what, I personally would be happy to take that risk------------vs a carrier that collects APD, that should have paid it over to HMRC, taxpayers money at that point, but decides to keep it. For how long has this practice being going on?
 
Danhill1905
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Re: Flybe News and Discussion Thread

Tue Jan 14, 2020 4:17 pm

Why aren’t Virgin Atlantic and the various consortiums picking up the bill? Surely they knew the financial state of Flybe before the takeover?
 
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OA260
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Re: Flybe News and Discussion Thread

Tue Jan 14, 2020 6:04 pm

Government reaches agreement to save Flybe

Business secretary Andrea Leadsom said the government had reached an agreement to keep troubled airline Flybe operating.

https://news.sky.com/story/government-r ... e-11908700


It will be intersting to see the details of what has been thrashed out and the impact for other Domestic routes operated by other airlines if any.
 
TC957
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Re: Flybe News and Discussion Thread

Tue Jan 14, 2020 6:13 pm

Yup - great news ! The UK govt has pledged in it's election manifesto to improve regional connectivity and if Flybe went best that would have been a huge blow to those ambitions, so it's sensible an agreement was reached. Hopefully we'll know more details in due course.
 
seansasLCY
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Re: Flybe News and Discussion Thread

Tue Jan 14, 2020 6:15 pm

TC957 wrote:
Yup - great news ! The UK govt has pledged in it's election manifesto to improve regional connectivity and if Flybe went best that would have been a huge blow to those ambitions, so it's sensible an agreement was reached. Hopefully we'll know more details in due course.


If they are sensible we won’t know all the details, otherwise every company will request such deals. When the Government made an offer to Nissan after the Brexit vote they refused to release details as it was financially confidential.
 
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OA260
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Re: Flybe News and Discussion Thread

Tue Jan 14, 2020 6:26 pm

The government was coming under huge pressure during the course of the last two days apparantly from NI leaders,Scottish leaders and airports such as BHD IOM GLA EDI EXT etc... I guess with so much powerful lobbying something had to be done. Now Flybe need to regain the support of the public and maybe rethink their cabin bag policy which hundreds seem to be angry about. It certainly seems to be the main bone of contention amongst passengers. They need to become more reliable and passenger friendly/focused. If they can manage that then they may just be around this time next year.
 
jomur
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Re: Flybe News and Discussion Thread

Tue Jan 14, 2020 6:42 pm

It appears that the owners will put in more money, should have been doing this in the first place and the Government will "have a look at APD". So basically put more money in yourself and we may do something or go bust... No Government money spent. If Flybe have been allowed to defer APD money then all the other airlines will now try and claim.the same.
 
Bongodog49
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Re: Flybe News and Discussion Thread

Tue Jan 14, 2020 6:52 pm

jomur wrote:
It appears that the owners will put in more money, should have been doing this in the first place and the Government will "have a look at APD". So basically put more money in yourself and we may do something or go bust... No Government money spent. If Flybe have been allowed to defer APD money then all the other airlines will now try and claim.the same.


Government have announced a "review" anyone who has any experience of the pace of the civil service in such matters will instantly know that it means months of fact gathering, interim report publishing, requests for feedback etc. By the time the review announces its verdict, Flybe will have either drastically pruned its operations back to what is profitable or disappeared altogether.
 
Turnhouse1
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Re: Flybe News and Discussion Thread

Tue Jan 14, 2020 7:00 pm

A better solution on APD would be to exempt certain domestic flights were rail is not a suitable alternative. In addition to the current Highlands and Islands exemption.

Flights between Northern Ireland and Great Britain
Flights between 2 airports where neither is (LCY, LGW, LHR, LTN, STN, SEN) and the train journey between the 2 locations takes > 4 hours.
 
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OA260
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Re: Flybe News and Discussion Thread

Tue Jan 14, 2020 9:03 pm

Turnhouse1 wrote:
A better solution on APD would be to exempt certain domestic flights were rail is not a suitable alternative. In addition to the current Highlands and Islands exemption.

Flights between Northern Ireland and Great Britain
.


NI-GB flights should certainly be exempt. Hopefully now that the leaders in NI have stopped throwing their toys out of the pram and are back doing what they get paid for they might raise this a bit harder with Westminster.
 
leghorn
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Re: Flybe News and Discussion Thread

Tue Jan 14, 2020 11:11 pm

Willie Walsh says it is blatant misuse of public funds.
 
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readytotaxi
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Re: Flybe News and Discussion Thread

Tue Jan 14, 2020 11:17 pm

leghorn wrote:
Willie Walsh says it is blatant misuse of public funds.

Only to be expected.
The government is always looking to tax people, fuel,smoking,driving. Death and Taxes the only thing that comes with a guarantee.
you don't get a second chance to make a first impression!
Growing older, but not up.
 
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RyanairGuru
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Re: Flybe News and Discussion Thread

Tue Jan 14, 2020 11:19 pm

leghorn wrote:
Willie Walsh says it is blatant misuse of public funds.


The more I think about it the more I'm inclined to agree with him.

It would probably be more cost effective to provide PSO funding to an airline like Loganiar or Stobart (presumably under the EI banner) to support routes to BHD, Channel Islands, ABZ, NQY etc if there is a legitimate public interest in maintaining those routes.

Flybe has systemic issues that go much deeper than whether or not they have to pay APD. Even if they survive, a slimmed down future could see a lot of those regional routes routes not touching MAN or LHR cut anyway.
Worked Hard, Flew Right
 
leghorn
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Re: Flybe News and Discussion Thread

Tue Jan 14, 2020 11:33 pm

Maybe I'm jumping to conclusions but in the reports I've read over the last few hours the APD change will be cost neutral which means others will be paying higher APD to bail out FlyBE.
 
Jetty
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Re: Flybe News and Discussion Thread

Tue Jan 14, 2020 11:46 pm

Bhoy wrote:
leghorn wrote:
https://www.irishtimes.com/business/transport-and-tourism/ecj-rules-against-aer-lingus-and-ryanair-in-16m-travel-tax-case-1.2913971

As long as UK is in EU this rule on APD applies.

But exemptions already exist for flights ex-the Scottish Highlands and Islands, as well as long haul ex- Belfast?

That’s something different and no domestic exception: flights to Highlands and Islands from outside the UK are exempt as well. The UK can add to the list of exceptions for rational reasons, but they can’t make a blanket exception for all domestic flights as long as they are in the EU. A distance based rule might make sense but that would inevitably include flights to i.e. AMS as well.
 
Arion640
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Re: Flybe News and Discussion Thread

Wed Jan 15, 2020 12:02 am

OA260 wrote:
Turnhouse1 wrote:
A better solution on APD would be to exempt certain domestic flights were rail is not a suitable alternative. In addition to the current Highlands and Islands exemption.

Flights between Northern Ireland and Great Britain
.


NI-GB flights should certainly be exempt. Hopefully now that the leaders in NI have stopped throwing their toys out of the pram and are back doing what they get paid for they might raise this a bit harder with Westminster.


The whole of the UK should be exempt. Would boost air passenger numbers massively.
 
BrianDromey
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Re: Flybe News and Discussion Thread

Wed Jan 15, 2020 12:13 am

RyanairGuru wrote:
It would probably be more cost effective to provide PSO funding to an airline like Loganiar or Stobart (presumably under the EI banner) to support routes to BHD, Channel Islands, ABZ, NQY etc if there is a legitimate public interest in maintaining those routes.


On the Face of it, maybe. The NQY-LHR PSO subsidy is roughly £5 each way. flyBe carries 8 million passengers a year, if the bill is 100 million, as rumoured then the ‘subsidy’ would be 12.50. But this is not a true subsidy, it’s a deferral of 100 million for 3 years. If this gives flyBe the space to reorganise then HMG avoid redundancy payments, repatriation costs, etc. If flyBe goes under HMG stand to loose the APD entirely. Financially it makes sense to allow flyBe to continue to provide connectivity to the UK and politically allows the government to say “look what we can do for British Business now we’re free of the EU shackles”. Even if that’s not entirely accurate.
 
Jetty
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Re: Flybe News and Discussion Thread

Wed Jan 15, 2020 12:14 am

Arion640 wrote:
OA260 wrote:
Turnhouse1 wrote:
A better solution on APD would be to exempt certain domestic flights were rail is not a suitable alternative. In addition to the current Highlands and Islands exemption.

Flights between Northern Ireland and Great Britain
.


NI-GB flights should certainly be exempt. Hopefully now that the leaders in NI have stopped throwing their toys out of the pram and are back doing what they get paid for they might raise this a bit harder with Westminster.


The whole of the UK should be exempt. Would boost air passenger numbers massively.

And where are you going to get the money from? UK state debt rose with 45% in the last decade, that’s more that any other European country except for Spain, Portugal and Greece.
 
caaardiff
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Re: Flybe News and Discussion Thread

Wed Jan 15, 2020 1:59 am

Why not tax all travel in that case? Rail prices are high and continue to rise, but in comparison to Aviation money gets p*ss*ed up the wall. Rail wages are high in comparison to Aviation, there is a ridiculous amount of wastage through poor inefficiency and unnecessarily high management levels in comparison to Aviation. Money gets ploughed into the railways by the government but not a lot goes to Aviation. Lots of Airports are struggling financially and rely on Airlines like flybe and nearly all Airlines are tightening their belts as much as possible.
Railways offer delay repay which is a portion of the ticket cost in the event of delays, yet Airlines have to abide to EU261 and compensate people, often much greater than the cost of a ticket. It should be a level playing field. Railways companies say that over 95% of the ticket cost goes back in to the railway, to prop up high wages and inefficiency.
 
BDKLEZ
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Re: Flybe News and Discussion Thread

Wed Jan 15, 2020 5:42 am

[/quote]It states it is only domestic traffic that gets a reduction/cancellatoin in APD so how will this traffic become cheaper when the folks fly abroad?[quote]

As it stands APD is a "band based" system, ie band A is 0-2000 miles (domestic or otherwise), so everyone falling withing that band A category will benefit. If however the UK government decides to change the rules and split the application of the tax into a APD-UK and APD-elsewhere then indeed you may have a point, especially as the spectre of Brexit is looming.
Last edited by BDKLEZ on Wed Jan 15, 2020 5:49 am, edited 1 time in total.
Trespassers will be shot; survivors will be shot again!
 
BDKLEZ
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Re: Flybe News and Discussion Thread

Wed Jan 15, 2020 5:48 am

FluidFlow wrote:
BDKLEZ wrote:
I get that, the problem is more, where do you get the passengers from for this Routes. Apart from NI, that is on a different island, you have the business traffic but will it increase? Do you think there will be a massive boost in leisure traffic from removing the tax? Leisure in the UK goes abroad. BA might be able to lower prices of connecting tickets from UK-LON-RoW but they might not even. So in my opinion it will not be a boost to UK aviation from a passenger point of view but for the airlines to become profitable or make more profit.

Fares might not even go down, as right now domestic UK travel seems to be not sustainable so ticket prices will stay but the airlines will be able to make profit.


Well leisure traffic will stay with TUI, Jet2 Holidays & usual charters etc. A reduction in APD will offer these operators a free marketing opportunity to promote somewhat discounted overall cost. leisure traffic, normally being families and/or groups of folks travelling together.



It states it is only domestic traffic that gets a reduction/cancellatoin in APD so how will this traffic become cheaper when the folks fly abroad?

Business traffic will not be affected as business still need to be done. The idea of video conferencing instead of going somewhere for a meeting has for a long time already been a smart option. But any reduction in APD will surely promote an increase of interest in travelling for business once more.

At the end of the day, APD is a tax like VAT and not a cost, it can and then be written off by business and as such will ultimately not have any effect on business travel. The company takes the initial expense and the clever folks in Finance sort out the finer details.

Regarding passengers and where they come from, as I said earlier the route network needs to be reviewed. But the pax will still come from where they always came from.


So at the end it will come down to the point if UK leisure pax is willing to travel inside the UK with an aircraft and if said travel is beneficial over individual traffic (using their cars).


As it stands APD is a "band-based" system, ie band A is 0-2000 miles (domestic or otherwise), so everyone falling withing that band A category will benefit. If however the UK government decides to change the rules and split the application of the tax into a APD-UK and APD-elsewhere then indeed you may have a point, especially as the spectre of Brexit is looming.
Trespassers will be shot; survivors will be shot again!
 
BDKLEZ
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Re: Flybe News and Discussion Thread

Wed Jan 15, 2020 5:59 am

TC957 wrote:
Yup - great news ! The UK govt has pledged in it's election manifesto to improve regional connectivity and if Flybe went best that would have been a huge blow to those ambitions, so it's sensible an agreement was reached. Hopefully we'll know more details in due course.


Not only that, if the airline goes under then they can say goodbye to any APD actually owed. So, it's right that they be open to discussions.
Trespassers will be shot; survivors will be shot again!
 
Staralexi
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Re: Flybe News and Discussion Thread

Wed Jan 15, 2020 9:15 am

How long before we see an application for an injunction to stop this weird deal to save an airline that seems to be in desperate trouble?
 
pdp
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Re: Flybe News and Discussion Thread

Wed Jan 15, 2020 9:24 am

Staralexi wrote:
How long before we see an application for an injunction to stop this weird deal to save an airline that seems to be in desperate trouble?


From who? The airline serves many airports that it's competitors don't so they can't moan that much. Plus, anything that gets APD reviewed is going to make every operator in and out of the UK very happy indeed.
 
User001
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Re: Flybe News and Discussion Thread

Wed Jan 15, 2020 9:29 am

Well IAG has just raised an objection according to the BBC.

https://www.bbc.co.uk/news/business-51117885
 
leghorn
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Re: Flybe News and Discussion Thread

Wed Jan 15, 2020 9:30 am

Jetty wrote:
Bhoy wrote:
leghorn wrote:
https://www.irishtimes.com/business/transport-and-tourism/ecj-rules-against-aer-lingus-and-ryanair-in-16m-travel-tax-case-1.2913971

As long as UK is in EU this rule on APD applies.

But exemptions already exist for flights ex-the Scottish Highlands and Islands, as well as long haul ex- Belfast?

That’s something different and no domestic exception: flights to Highlands and Islands from outside the UK are exempt as well. The UK can add to the list of exceptions for rational reasons, but they can’t make a blanket exception for all domestic flights as long as they are in the EU. A distance based rule might make sense but that would inevitably include flights to i.e. AMS as well.

Ireland has PSO routes to Aran Islands, Kerry and Donegal but when they tried to implement a lower rate of APD for more local flights in general they fell foul of the rules for a level playing field for trade in Europe.
 
pdp
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Re: Flybe News and Discussion Thread

Wed Jan 15, 2020 9:41 am

User001 wrote:
Well IAG has just raised an objection according to the BBC.

https://www.bbc.co.uk/news/business-51117885


That seems to be WW saying "it's not fair" rather than a formal objection. He can't really do too much as BA really only serves major airports and seems to ignore the regional airports that FlyBE seems to love.
 
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JannEejit
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Re: Flybe News and Discussion Thread

Wed Jan 15, 2020 9:49 am

leghorn wrote:
Willie Walsh says it is blatant misuse of public funds.


Surely not Willie Walsh formerly of British Airways who benefitted substantially from public funds whilst others faltered in the pre-privatisation years ? :?
Last edited by JannEejit on Wed Jan 15, 2020 9:54 am, edited 1 time in total.
 
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JannEejit
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Re: Flybe News and Discussion Thread

Wed Jan 15, 2020 9:54 am

pdp wrote:
User001 wrote:
Well IAG has just raised an objection according to the BBC.

https://www.bbc.co.uk/news/business-51117885


That seems to be WW saying "it's not fair" rather than a formal objection. He can't really do too much as BA really only serves major airports and seems to ignore the regional airports that FlyBE seems to love.


BA have no interest in regional services, they sold BA Connect to Flybe after all. Or should the term "offloaded" be more appropriate ? BA might do well to consider that in certain geographic areas of the UK flying is more necessity than luxury. Yeah sure it all comes down to business and shareholders these days but perhaps we could consider who actually stands to lose the most if inter-regional connectivity is not supported to make it viable. Maybe a nationalised regional airline is required but what the heck do I know ?
 
skipness1E
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Re: Flybe News and Discussion Thread

Wed Jan 15, 2020 9:59 am

This is one of those cases where the airline as a commercial business, is also a fundamental pillar of the economy. Think the HIAL without Loganair or Caledonian McBrayne.
It's a shame that so many see the world as the Sith do, in absolutes. There is a whole nuance between untamed free market American style capitalism and Soviet style planned economies. On a case by case basis, Thomas Cook collapsing spoiled a lot of holidays and cost a lot of jobs, there would be a wider economic and political impact if flybe goes down. One of the major issues at the election was rebalancing the economy away from the London centric metropolitan bubble, saving flybe sends the signal that the PM is serious. By all means say it creates a bad precedent, but then so did bailing out Rolls Royce!
How many UK domestic scheduled operators remain?
BA / CFE
EZY
LM
BE & T3 & SI
Is that it? Four core brands? *FOUR*? It's APD that's killing the domestic industry as well as compeition from state subsidised rail. For the good saving flybe will so, we can afford it, so long as the management that got them there are not part of the long term future.
 
Boeing74741R
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Re: Flybe News and Discussion Thread

Wed Jan 15, 2020 10:29 am

User001 wrote:
Well IAG has just raised an objection according to the BBC.

https://www.bbc.co.uk/news/business-51117885


Given they own BA and given the history between BA and VS, I'm not surprised in some respects.

JannEejit wrote:
BA have no interest in regional services, they sold BA Connect to Flybe after all. Or should the term "offloaded" be more appropriate ?


Either way, it is worth nothing that the sale of BA Connect to Flybe occurred during Walsh's tenure as BA CEO.
 
BealineV953
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Re: Flybe News and Discussion Thread

Wed Jan 15, 2020 11:02 am

JannEejit wrote:
pdp wrote:
User001 wrote:
Well IAG has just raised an objection according to the BBC.

https://www.bbc.co.uk/news/business-51117885


That seems to be WW saying "it's not fair" rather than a formal objection. He can't really do too much as BA really only serves major airports and seems to ignore the regional airports that FlyBE seems to love.


BA have no interest in regional services, they sold BA Connect to Flybe after all. Or should the term "offloaded" be more appropriate ? BA might do well to consider that in certain geographic areas of the UK flying is more necessity than luxury. Yeah sure it all comes down to business and shareholders these days but perhaps we could consider who actually stands to lose the most if inter-regional connectivity is not supported to make it viable. Maybe a nationalised regional airline is required but what the heck do I know ?


flybe competes directly with BA on a number of domestic routes from / to Heathrow. BA collects the APD and passes it to HMRC. flybe collects the APD and keeps it. That distorts competition, and IAG / WW / BA are within their rights to seek clarification around what the Government has agreed to.
Ever since childhood, when I lived within sight of London Airport, I have seldom seen a plane go by and not wished I was on it.”
With apologies to Paul Theroux - ‘The Great Railway Bazaar’
 
sandyb123
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Re: Flybe News and Discussion Thread

Wed Jan 15, 2020 11:10 am

User001 wrote:
Well IAG has just raised an objection according to the BBC.
https://www.bbc.co.uk/news/business-51117885


Hmm this seems like a bit of a no news story. BA is not a rival of BE save for EDI / GLA - London so hardly a 'rival'. There has been no state bail out, just a promise to review the APD (which will likely take years). If BA went cap in hand to the transport secretary asking for a delay in APD payments due to financial problems then the government should offer them the same terms.

BBC wrote:
It is understood Flybe could be given up to three months' breathing space to pay about £100m worth of duty.


Three months doesn't really buy much time. If Flybe are in as much trouble as it seems then this is a 90 day stay of execution. Unless they have the money (seems unlikely) or Virgin / Delta are willing to bail them out to the tune of £100m (also seems unlikely).

skipness1E wrote:
Is that it? Four core brands? *FOUR*? It's APD that's killing the domestic industry as well as compeition from state subsidised rail. For the good saving flybe will so, we can afford it, so long as the management that got them there are not part of the long term future.


The railway is it's own basket case and a victim of miss-management and overcrowding. Actually putting all of the domestic air travellers onto the rail network overnight would be chaos. I personally believe that the train is a much more sustainable domestic travel option, but not in its current form. Northern Ireland to mainland Uk is tricky but doesn't have the noose of APD.

Sandyb123
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leghorn
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Re: Flybe News and Discussion Thread

Wed Jan 15, 2020 11:20 am

The Credit Card companies don't have faith. Nothing will help the company if the Consortium don't capitalize it as was promised but not done.
 
phollingsworth
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Re: Flybe News and Discussion Thread

Wed Jan 15, 2020 11:49 am

Danhill1905 wrote:
Why aren’t Virgin Atlantic and the various consortiums picking up the bill? Surely they knew the financial state of Flybe before the takeover?


They 'knew' what they were getting into at the time. However, that does not mean that today corresponds well to the prediction in Jan 2019 of where Flybe would be in Jan 2020. Some areas may have degraded substantially in that time. "Promises" might have been made to some parties that never cam to fruition. Debt renegotiation may not have gone to plan. There are lots of things. As for 'picking up the bill'. Connect airways is a company limited by equity. That equity will have been agreed back when it was formed. If the shareholders want to add more equity they can. However, depending on the rules it might be that one of the shareholders couldn't or wouldn't provide more unless other concessions were made. This is a problem when you form these closely held companies, one partner can sink the rest.

I do have a question on APD payments to HMRC. Are these due based on when tickets were purchased or when the actual flights are taken. If it is based on purchase then for a company with marginal cash-flow a small change in the timing of accounts receivable can make them insolvent very quickly, even if the slightly longer-term is ok.
 
tobsw
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Joined: Mon Jul 11, 2011 2:29 pm

Re: Flybe News and Discussion Thread

Wed Jan 15, 2020 11:56 am

APD is paid for each transported passenger.
 
phollingsworth
Posts: 759
Joined: Sat Mar 06, 2004 6:05 am

Re: Flybe News and Discussion Thread

Wed Jan 15, 2020 12:02 pm

tobsw wrote:
APD is paid for each transported passenger.


Does HMRC collect it prior to or post the actual transportation? Most tax authorities collect tax on a periodic basis, e.g quarterly. However, some do it before the charge is actually accrued, others after, and others a mix. If Flybe isn't getting their money from the credit-card companies until well after the flight actually takes place it can create a significant cash-flow issue.
 
pdp
Posts: 245
Joined: Thu Dec 14, 2017 7:14 pm

Re: Flybe News and Discussion Thread

Wed Jan 15, 2020 12:38 pm

BBC are reporting that IAG have gone to the EU wrt the deal between Flybe and the government: https://www.bbc.co.uk/news/topics/cewrlqm4wz5t/flybe

Two questions from this really:

1. Does the government's intervention constitute a commercial approach (which is allowed), or plain-old bailout?
2. Does IAG *really* want Flybe to go bankrupt, or is this some other game?
 
Jetty
Posts: 1305
Joined: Wed Nov 11, 2015 12:27 pm

Re: Flybe News and Discussion Thread

Wed Jan 15, 2020 12:46 pm

pdp wrote:
BBC are reporting that IAG have gone to the EU wrt the deal between Flybe and the government: https://www.bbc.co.uk/news/topics/cewrlqm4wz5t/flybe

Two questions from this really:

1. Does the government's intervention constitute a commercial approach (which is allowed), or plain-old bailout?

This is definitely not a commercial approach given it’s effectively a loan without interest.
 
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Phosphorus
Posts: 1035
Joined: Tue May 16, 2017 11:38 am

Re: Flybe News and Discussion Thread

Wed Jan 15, 2020 12:50 pm

pdp wrote:
...
2. Does IAG *really* want Flybe to go bankrupt, or is this some other game?


Well, IAG playing "chicken" with Virgin&Co is feasible hypothesis.

FlyBe continuing to fly is not too much worry for IAG.
Virgin getting FlyBe to continue to fly, with taxpayers and others footing the bill -- and with a risk that APD is getting more or less indefinitely waived for FlyBe -- that is a lot of worry for IAG. It's a thin end of the wedge.

So, driving headlong into it, and calling things like they are -- if consortium backing FlyBe says that FlyBe is critical to UK's connectivity, and needs to continue flying -- they have to pony up the cash, not get the taxpayers. That means, among other things, Virgin paying up.
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3AWM
Posts: 232
Joined: Sat Jul 23, 2016 1:01 pm

Re: Flybe News and Discussion Thread

Wed Jan 15, 2020 1:01 pm

I checked the terms of the LHR / BMI remedy slots https://ec.europa.eu/competition/merger ... 290_EN.pdf

[1.3 Grandfathering of Slots 1.3.1As a general rule, the Slots obtained by the Prospective Entrant from IAG as a result of the Slot Release Procedure shall be used only to provide a Competitive Air Service on the Relevant City Pair for which the Prospective Entrant has requested them from IAG through the Slot Release Procedure. These Slots cannot be used on another city pair unless the Prospective Entrant has operated the Relevant City Pair for which these Slots have been transferred for a number of full consecutive IATA Seasons (“Utilisation Period”). 1.3.2The Prospective Entrant will be deemed to have grandfathering rights for the Slots once appropriate use of the Slots has been made on the Relevant City Pair for the Utilisation Period. In this regard, once the Utilisation Period has elapsed, the Prospective Entrant will be entitled to use the Slots obtained on the basis of these Commitments exclusively to operate services on any European Short-haul City Pair or the Identified Long-haul City Pairs (“Grandfathering”).

On order to obtain grandfathering rights on their LHR slots Flybe will have to continue operating these routes for 3 IATA seasons.

They started operating the routes in March 2017 https://www.flybe.com/media/news/1612/20 so they will obtain these rights in 2 and a half months.

If Flybe make it that far they will own an additional saleable asset. If they can sell these slots then they can settle any APD liability. It seems notable to me that the period of the deferment is 3 months rolling.

The press states that Stobart and Cyrus don't want to put in any more money. It wouldn't surprise me if the £100m + investment is coming from VS to purchase those slots outright.
 
jomur
Posts: 360
Joined: Sun Jun 19, 2016 6:36 pm

Re: Flybe News and Discussion Thread

Wed Jan 15, 2020 1:12 pm

Virgin probably want Flybe to keep going until March then they "somehow" get hold of Flybe's LHR slots.
 
Boeing74741R
Posts: 1416
Joined: Tue Apr 17, 2007 5:44 am

Re: Flybe News and Discussion Thread

Wed Jan 15, 2020 1:15 pm

phollingsworth wrote:
Danhill1905 wrote:
Why aren’t Virgin Atlantic and the various consortiums picking up the bill? Surely they knew the financial state of Flybe before the takeover?


They 'knew' what they were getting into at the time. However, that does not mean that today corresponds well to the prediction in Jan 2019 of where Flybe would be in Jan 2020. Some areas may have degraded substantially in that time. "Promises" might have been made to some parties that never cam to fruition. Debt renegotiation may not have gone to plan.


I know there would have been a period of due diligence before the takeover was completed, but there's also the fact that the state of certain parts of companies being acquired don't become truly understood or clear until after the takeover. For example, we've seen Mike Ashley publicly expressing buyer's remorse over acquiring House of Fraser for that reason.

Phosphorus wrote:
pdp wrote:
...
2. Does IAG *really* want Flybe to go bankrupt, or is this some other game?


Well, IAG playing "chicken" with Virgin&Co is feasible hypothesis.

FlyBe continuing to fly is not too much worry for IAG.
Virgin getting FlyBe to continue to fly, with taxpayers and others footing the bill -- and with a risk that APD is getting more or less indefinitely waived for FlyBe -- that is a lot of worry for IAG. It's a thin end of the wedge.

So, driving headlong into it, and calling things like they are -- if consortium backing FlyBe says that FlyBe is critical to UK's connectivity, and needs to continue flying -- they have to pony up the cash, not get the taxpayers. That means, among other things, Virgin paying up.


I know this may sound like I'm going into conspiracy theory territory, but this could also be a "smoking gun" IAG are after to thwart VS' attempts to become a domestic hub carrier competitor.

That said, we don't know what was agreed exactly between Flybe and the government, in much the same way we don't know what was agreed or what assurances were given to Nissan before they announced new models to be built at Sunderland.

sandyb123 wrote:
Northern Ireland to mainland Uk is tricky but doesn't have the noose of APD.


Similar with Isle of Man and Channel Islands to Great Britain. There's the ferry, but what good's that if sailings are cancelled like this Monday's daytime sailings between Douglas and Heysham due to the weather and, in the case of Isle of Man, only has one ferry operating through the winter months? There's also the fact that in much the same way some people refuse to fly there are some people who refuse to go on a boat at sea.
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