Flybe First Airline to Fall Victim to Covid-19?

The airlne’s situation was far from rosie before the Covid-19 outbreak in Europe. The airlne has suffered overall losses in the past 6 years. Just in the month of February the UK Government had granted the airlne a 100 Million Pound rescue loan.

We are by no means talking about a small airline here. In the European transport panorama we’re not used to seeing regional airlines as much as you can see in the US for instance. But this was the largest regional airline operating in the European continent.

Flybe covered, up to just days ago, about 40% of the UK’s domestic air transport. In 2019 the airline transported 9.5 million passengers operating an owned fleet of 63 aircraft at the moment of ceased operations. Sadly an excess of 2300 employees will lose their jobs.

Is this The Start of a Dark Season for Airlines?

The air travel industry had been on its peek levels for quite a long period of time. Many airlines had started operations in the past 12 years. The good days had started to set in the past 12-18 months. The first airlines to suffer where low cost airlines, such as WoW Air (from Iceland), Air Italy and Thomas Cook (Again in the UK).

Why is this all happening?

The air travel industry had reached its highest peak following the trend of the worldwide economy. Also the market had reached a saturation level. The number of airlines had become to high to be sustainable. And as soon as the economic outlook started to deteriorate the first airlines started to suffer and eventually go bankrupt.

Covid-19 was nothing else but the final straw for airlines who’s conditions were already precarious. This exactly the case for Flybe (in the UK) and for AirItaly (in Italy). The latter, 49% owned by Qatar Airways, had registered loss after loss in the past years, not even coming close to the business plan layed down when the Qataris made their entrance in the Sardinian airline.

As it became clear that booking were heading south for the 2020 summer season the Italian partner, which held 51% of shares, decided to pull out forcing the airline to file for bankrupcy.

So in simple terms all of this is happening for 2 reasons that are related to each other. Covid-19 is drastically reucing demand for air travel worldwide. At the same time the air travel market was over saturated with too many airlines for it to be sustainable. The less stable and economically sound airlines are the first to undercome this very grim start of 2020.