Flybe pensioners in limbo amid talks over fate of retirement fund

THE retirement watchdog has opened urgent talks with pension trustees of failed firm Flybe, amid fears that more than 1,300 of the fund’s members are facing financial ruin.

Regulators are battling to solve a crisis at the British Regional Airlines Group pension scheme, which faces disaster because retirees are not protected by the pension lifeboat. The fund is registered in the Isle of Man rather than the UK – meaning members are not entitled to payments from the Pension Protection Fund (PPF), which normally steps in to shore up collapsed companies’ schemes.

Some £170m of benefits are owed to 1,350 members, according to a valuation in 2018. The scheme had a £12m funding shortfall at the time. Fund trustees met on Thursday for an initial assessment of the situation following Flybe’s collapse after Europe’s biggest regional airline was hammered by an industry-wide slowdown due to coronavirus.

A number of rescue options are on the table, although many of them depend on whether the scheme still has a funding shortfall and how big this is. The fund could potentially be offloaded to an insurance company, a move that would be likely to leave members nursing cuts to their payouts.

The pension fund’s offshore base was a key consideration when a consortium led by Virgin Atlantic bought the ailing airline for 1p a share a year ago.

Flybe collapsed in the early hours of Thursday morning after a government rescue fell through. A spokesman for

The Pensions Regulator said: “We remain in discussions with the trustees of Flybe’s British Regional Airlines Group pension scheme at this challenging time as part of our role to support the trustees as they secure the best possible outcome for members of the pension scheme.”

Separately the Government faced fresh calls to overhaul air passenger duty, a levy of up to £26 per flight.

Charlie Cornish, the boss of Manchester Airports Group, said: “This burden has been a major factor in the Monarch, Thomas Cook and Flybe bankruptcies over the last three years.”

♦ Air New Zealand has sold its London Heathrow take-off and landing slots for NZ$42M (£21m).

The buyer of the slots – for a flight which arrives at 10.50am and departs at 3.20pm – was not revealed.