Coronavirus pushes Flybe close to edge

FLYBE is seeking urgent financial support from the Government as fresh doubt emerged over its future amid the impact of the coronavirus outbreak on its bookings.

The regional airline, which was taken over last year by a consortium comprising Virgin Atlantic, Stobart Group and hedge fund Cyrus Capital, risks falling into administration within days as it struggles to secure a £100million loan.

It was saved from collapse earlier this year following a tax holiday of up to £10million which drew criticism from rivals such as Ryanair and British Airways owner IAG.

The airline declined to comment on reports it only has enough resources to survive until the end of this month.The Department for Transport said it would not comment on “speculation”.

Ministers have agreed to hold a review into Air Passenger Duty (APD), the structure of which adds £26 to the price of most return domestic flights such as those operated by Flybe. It could be altered in next week’s Budget.

But Sky News reported that the chances of Flybe surviving until then looked “more remote”. A source said: “The Budget now looks a long way off.An already difficult situation has been made a lot worse.”

Flybe serves around 170 destinations and has a major presence at UK airports such as Aberdeen, Belfast City, Manchester and Southampton.

Its finances have been squeezed by rising fuel costs, falling demand and competition.

Garry Graham, of the Prospect union, said: “Flybe provides important transport connections to and from parts of the UK where other viable options often don’t exist.

“A number of regional airports are highly reliant on Flybe for most or all of their scheduled services.

“It is very worrying if the Government fails to provide the loan that is required as part of a package of rescue measures. It risks turning its back on these areas of the country and the workers at those airports.”