Flybe still on the brink of collapse – new report

Flybe is said to be in desperate talks with airports over payments for landing fees it has failed to make.

The airports are said to be talking, and the last thing they need is to loose another major carrier, especially from Birmingham, one of its biggest bases.

More news on how serious the situation has become for Flybe cane out over the weekend when it was acknowledged that Flybe has mortgaged all of its engines and buildings to Global Loans Agency Service. This was something Thomas Cook did just before it crashed and is something of a last resort.

The company basically has no assets and no more collateral to raise any more money.

The loss of income to airports like Birmingham would be severe, with Flybe representing some 30% of its current business.

The whole situation is being made worse by the relative failure of the new investors to pump money into the business.

British Airways and RyanAir have both vociferously complained to the Government over the tax holiday they granted Flybe, and launched formal objection processes with the EU competition authorities.

One of their biggest arguments is that Virgin Atlantic as a 30% share holder is owned largely by Delta Airlines (49%) who have more than enough money to prop up Flybe if they’re serious about it. Virgin Atlantic Airways Ltd however can only provide 30% of the liquidity as the other 70% of Connect, who own Flybe is owned by the troubled Stobart Group and Cyrus Capital.

They have provided £30m but seem reluctant to actually spend it in case, one can only assume, they never get it back. Rather a chicken and egg situation, if they don’t spend it the airline will fail, if they do it might fail anyway and they’re worse off. Of course it could make all the difference if they did spend it, and it may well survive and flourish.

Meanwhile, Monday morning it was revealed the Government has hired Alvarez&Marsal to advise it on providing a commercial loan to Flybe.