British regional airline Flybe is fighting for survival and the British government is being called upon to help prevent a second airline failure in less than six months, according to media reports.
Flybe said it does not comment on rumour and speculation, while the government's Department for Transport said it does not comment on the financial affairs of private companies.
Sky News reported that Flybe bosses held rescue talks with the government on Sunday, January 12, as its fragile finances were hit by a higher fuel price during the winter months when demand is lower as fewer people fly.
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Accountancy firm EY is on standby to handle the possible administration of Flybe, added Sky. EY did not immediately respond to requests for comment.
Should Flybe collapse, it would be the second high-profile failure in Britain's travel industry in less than six months after Thomas Cook went into liquidation last September, stranding thousands of passengers.
Flybe has 68 aircraft and approximately 2,000 staff, and was already struggling when it was bought by Connect Airways, a consortium created by Virgin Atlantic, Stobart Group and investment adviser Cyrus Capital, for $2.8 million last year.
The new owners' turnaround plan involved providing a £20 million bridging loan facility and up to £80 million of funding, but reports said that more investment is needed, pushing Flybe to the brink.
Flybe's fleet of small aircraft includes the Bombardier Dash-8 Q400 which seats 77 passengers and connects regional airports such as Exeter, where it is based, Birmingham and Aberdeen to other British and European cities, as well as operating flights from Europe's busiest airport Heathrow.
While demand for flights from airports such as Heathrow was healthy, Flybe struggled to compete against road and rail options on some regional flights, said analysts.
Ben Bradshaw, lawmaker for the opposition Labour party who represents Exeter, said that Flybe is important for British connectivity.
"I would expect the government to work closely with its management to secure the future of such a strategically important business," he was quoted by local news provider DevonLive as saying.
Flybe said in its statement, "Flybe continues to provide great service and connectivity for our customers while ensuring they can continue to travel as planned. We don't comment on rumour or speculation."
Not In A Position To Detail Possible Help
British junior transport minister Paul Maynard told lawmakers on Tuesday January 14 that the British government is not currently in a position to detail what assistance it could provide to Flybe.
"I regret that I'm not able to go into further detail at this stage, but I will update the house further when it is appropriate to do so," Maynard said.
He said that he could not comment on the issue of relief from Air Passenger Duty (APD) as that was a matter for the finance department.
Earlier on January 14, Prime Minister Boris Johnson said that Flybe is important for Britain's transport links and that the government will do what it can to help the company.