Flybe collapse: From refunds to alternatives, what happens now?

Flybe, the UK regional airline, has gone bust for a second time – with the loss of hundreds of jobs, leaving the travel plans of tens of thousands of passengers in tatters.

The news was broken at 4am on Saturday by the Civil Aviation Authority, which is urging travellers with bookings on Flybe not to go to the airport.

Remind me of the original Flybe?

The original Flybe, which had previously been known as Jersey European and British European, had been fairly successful for several decades – when it floated on the stock exchange in 2010 it was briefly worth a quarter-of-a-billion pounds. But a combination of mismanagement and misfortune culminated in a £100m rescue bid.

After Flybe mark 1 burned through that cash in a year, it went bust in early March 2020, at the start of the Covid pandemic. More than 2,000 people lost their jobs and tens of thousands of passengers with advance bookings had their travel plans torn up.

How was the airline resurrected?

One of the partners in that failed rescue bid, Cyrus Capital, believed there was still a viable business. It bought the name from the receiver and crucially also secured valuable slots at London Heathrow. The reborn Flybe was re-established at Birmingham airport, with a big operation at Belfast City, and links from Heathrow airport to a range of UK destinations as well as Amsterdam.

The flight data specialist Cirium says Flybe was scheduled to serve 17 destinations across the UK and Europe in 2023 – with Belfast City, Birmingham and London Heathrow being the largest destinations by flights.

The airline operated seven daily flights at Heathrow, Britain’s busiest airport, to Amsterdam, Belfast, Newcastle and Newquay.

Next week Flybe was scheduled to operate 292 flights – equating to over 22,700 seats.

What went wrong?

Relatively few of those seats were sold at prices high enough to make Flybe viable. Operations restarted in April 2022. But by then rivals had moved in on the previously profitable routes, with Loganair taking the crown as the UK’s biggest regional airline, leaving little room for Flybe.

The nine months of Flybe mark 2’s existence were characterised by frequent flight cancellations and rearrangements of the route network, with late aircraft deliveries adding to the problem.

On the flights that did operate, passenger loads were often very low: I flew from Leeds Bradford to Heathrow, because it was much cheaper than the train, yet there were only a dozen paying passengers on board.

With intense competition on most of its route network, Flybe was simply not a going concern. The airline schedule analyst Sean Moulton said: “Whilst I feel sorry for the staff of the collapsed Flybe, it did seem inevitable. The Q400 aircraft had issues, the majority of the routes they operated had competition and their brand was tarnished from the collapse in 2020.

“It was all a recipe for failure.”

What’s the advice for passengers with Flybe tickets?

Do not go to the airport unless you have made arrangements for an alternative flight.

Will other operators help?

Yes. Rival airlines are already making “rescue fares” available to enable people who have tickets for future Flybe flights.

For passengers booked to fly up to 5 February, easyJet is offering a fare of £49 for domestic routes and £79 for international routes including a 15kg hold bag on presentation of their original Flybe booking reference. Travellers will need to call 0330 551 5151.

British Airways is offering one-way fares of £50 (plus taxes, fees and charges), including a checked-in bag of up to 23kg, on journeys between London Heathrow, Belfast City, Newcastle and Amsterdam. Prospective passengers must call 0344 493 0787.

Ryanair is focusing on passengers to and from Belfast from late March onwards. Rescue fares serving East Midlands, Manchester and London Stansted start at £30, for travel from Sunday 26 March.

Can I get my money back?

Probably. A refund won’t arrive automatically; you must apply, but it should be a straightforward process. The banks will be expecting a flood of claims

If you paid more than £100 in a single transaction, a credit card issuer has a legal duty to refund you under Section 75 of the Consumer Credit Act. This makes the card provider jointly liable with the merchant, in this case Flybe, for the provision of the service. But even if you used a debit card, or a credit card for less than £100, the “chargeback” procedure will work in your favour.

In this context, with the airline no longer being a going concern, chargeback means the bank refunding you the money you spent on a service that has not been, or will not be, provided. It is a voluntary rather than obligatory arrangement, but all the major UK card issuers are signed up to it.

Most banks make it straightforward. Barclaycard, for example, suggests you go online, find the payment and click on “Help with this transaction”. Santander also recommends online claims. Other providers may ask you to phone.

Passengers who booked through agents will need to see what the agent is offering. The Civil Aviation Authority says: “They may have provided travel insurance that includes Scheduled Airline Failure cover.”

I booked through an online travel agent ...

In that case you could face a struggle – especially if the agent is based abroad. For example, Mytrip – based in Sweden – tells passengers: “Once the airline has confirmed that you will receive a refund, we will refund the money to your original form of payment.”

Clearly Flybe is not going to confirm any refunds to anyone. The Independent has asked Mytrip (which is part of the same group as FlightNetwork and GoToGate) what it intends to do about refunding passengers booked with Flybe.

What about the staff?

This is very sad news for the several hundred people employed by Flybe – but unlike in March 2020, when we were at the start of a pandemic that would bring airlines to their knees and trigger tens of thousands of job losses, aviation is fairly bouyant at the moment and there will be plenty of demand from other airlines.

British Airways and easyJet have already invited Flybe staff to apply for jobs, while Wizz Air UK is planning an online recruitment event for 1d Monday 30 January at 1pm, as well as “live” recruiting drives at Birmingham on 3 and 4 February at 9am.

David Pike, managing director at Interpath Advisory and joint administrator to Flybe, said: “We will provide support to those who have been affected by redundancy, including supporting them in making claims from the Redundancy Payments Service.

“We will be helping employees obtain access to important records and information such as training records.”

Could Flybe come back?

Probably not. Mr Pike said: “We do intend to preserve scaled-back elements of the operating platform for a short period such that a rescue transaction remains a possibility.

“Should any interested party want to explore reviving the airline, I’d encourage them to come forward and make contact with utmost urgency.”

But strenuous efforts were made to sell Flybe before the airline shut down, without success. If there were no takers for a going concern it is difficult to see a buyer wanting to take on a brand that the public has seen go bust twice in under three years.

Mystery surrounds what will happen to the airline’s valuable slots at Heathrow.

I am still owed money by Flybe for a delayed or cancelled flight. Will I get my cash?

Almost certainly not. The carrier earned the nickname “FlyMaybe” because of its frequent cancellations, and is believed to owe tens of thousands – possibly hundreds of thousands – of pounds in compensation under European air passengers’ rights rules.

You can register a claim with the administrators, by emailing flybecustomers@interpathadvisory.com and explaining your situation. It may be that they can recover a few pence in every pound owed to you. But in your position, I am afraid I would write off the debt.

Are other airlines at risk?

No. UK regional flying has always been marginal, but other carriers are in good shape due to the strong demand. Ryanair has just announced profits of £2m per day even in the difficult last three months of the year.

Will air fares increase with Flybe gone?

Slightly, yes, on routes where Flybe provided competition – often at very low fares. Choice will also be reduced, which will be particularly pertinent at Belfast City airport. But the overall effect will be marginal, since Flybe was still a minor player.