FlyBe crash questions resilience of UK transport infrastructure | business news

FlyBe was a smaller and less meaningful business than when it first collapsed in March 2020, but its second collapse in three years has created problems not only for potential owners but also for UK connectivity. Here comes the problem.

The collapse of what was then Europe’s largest regional airline three years ago was blamed on a spreading pandemic, but in reality the company has been struggling for years.

A government-brokered deal with shareholders including Virgin and U.S. hedge fund Cyrus Capital two months ago kept the planes flying, but ultimately they could not resist economic gravity.

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Cyrus Capital bought the brand and revived it last April, trying to do what FlyBe 1.0 failed to do; profit from an airline dedicated to serving the UK country.

Its strategy is to use regional services as a bridgehead into international travel, filling unfilled slots on flights to and from Belfast, Birmingham and London with passengers flying to the US and Europe.

The route to Amsterdam and the slots at Heathrow are at the heart of the plan, providing access to major hub airports from which FlyBe hopes to form alliances with major airlines.

With the airline industry still recovering from COVID and stiff competition from more established low-cost carriers, the plan hasn’t worked out yet.

FlyBe was due to take delivery of 17 new planes this year, but delays in the new fleet have limited the potential for the partnership, despite Cyrus spending an estimated £50m to keep the business flying.

That cash has now been spent and regulators are looking for buyers willing to give the brand a third chance, while the UK faces a recurring question about the resilience of its transport infrastructure.

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The airline has entered administration less than a year after returning to the skies after a previous collapse

This is a particularly salient issue in Northern Ireland, where FlyBe is the main operator outside of Belfast City Airport.

In 2020, the future of FlyBe is a political issue, with ministers willing to discuss cutting passenger tariffs to deliver on Boris Johnson’s campaign promise to lift the bar across the UK.

Three years on, the political necessity, and Mr Johnson’s efforts, have largely passed, but the economic imperative remains. Transport infrastructure is a prerequisite for growth, especially if you’re trying to share it, and cutting off regional ties comes at a price.

With the rail industry in turmoil and the train network in a national embarrassment, you might think now is the perfect time to offer an alternative.

The second grounding of FlyBe suggests otherwise.

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