The Daily Telegraph - Saturday - Travel
How Flybe’s collapse will affect your summer plans
Travellers have been left with many questions since the airline went into administration. Nick Trend has the answers
It was a genuine case of déjà vu when Flybe cancelled all its flights and went into administration last weekend. It left nearly 2,500 people stranded on Saturday and about 75,000 with worthless tickets for future dates.
A similar thing had happened in 2020, just as the early stages of the pandemic were beginning to affect bookings. The assets of the failed airline were bought from the administrator and it was relaunched last April only to end in miserable failure less than 10 months later.
Will more collapses follow? What will the effect be on other airlines, routes and fares? And how can you protect yourself against losing money and having travel plans ruined? Here is our Q&A on how to avoid the fallout.
WHY DID FLYBE COLLAPSE?
Too few people wanted to fly on the routes it was offering at fares which were high enough to keep it in business. It focused on UK regional airports where demand has not rebounded as strongly as it has for more popular overseas destinations.
WILL OTHER AIRLINES FOLLOW? If history is our guide, probably. Domestic airlines have failed on a regular basis in recent years but in the short term, the collapse of Flybe helps its rivals – especially those that are bigger and more financially powerful. Ryanair and British Airways have made a concerted effort to pick up business from passengers left with worthless Flybe tickets, and on Monday the Irish airline reported record profits of €211million (£185million) between October and December. It said demand for summer holiday routes was surging, and easyJet has also reported strong bookings and says it will soon return to profitability. That is good news for bigger, stronger airlines but it may have implications for how much we have to pay to fly with them.
WILL AIR FARES GO UP?
They already have. Last month the Office for National Statistics said fares had risen by 44 per cent in 2022, the largest rise since records began in 1989. Competition is a big factor in keeping downward pressure on fares: the fewer airlines there are, the more we are likely to have to pay for our flights.
ARE CONSUMERS PROTECTED? Frankly, no – or at least not properly. There is no structured way of refunding or rescuing passengers who are stranded or lose their money because of the collapse of a scheduled airline.
As I reported last week, Atol protects some arrangements (caa.co.uk/atolprotection) but the rules can be complex for consumers and most passengers on scheduled airlines are not covered.
Various governments have promised to plug this gap since the collapse of Air Europe in 1991. Most recently a major investigation – the Airline Insolvency Review – was commissioned after the collapse of Monarch Airlines in 2017.
It reported in March 2019 with some sensible recommendations which the Government accepted but didn’t enact. Since then we have seen the failure of Thomas Cook Airlines and Flybe (twice) and nothing else has happened. Until it does, air travellers have no choice but to arrange protection themselves.
HOW DO YOU PROTECT YOURSELF? Many travel insurance policies will cover you for the failure of a scheduled airline. If you book using a credit card and pay the airline directly, you will also be able to claim a refund of the fare paid, or the appropriate proportion of it.
What you cannot protect yourself against is the cost of a replacement flight. Over the weekend, Ryanair and BA both offered “rescue” fares aimed at passengers who had been booked with Flybe, but those with bookings further in the future are likely to have to fork out more than they paid originally.