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5 March 2020Newsletters and Updates
Coronavirus appears to have pushed the struggling airline, Flybe, over the edge. The company had been faltering for some time and was bought out by a consortium in February 2019 but sadly this was not enough to turn its fortunes around.
Administrators will now be seeking buyers for the business and assets of the company whilst also consulting with the 2,400 staff as their employment will be at risk.
This failure will hit the community in and around Southampton particularly hard as the carrier operates approximately 95% of all flights from Southampton airport. Business travellers and holiday makers alike will now find it much more difficult to fly to destinations such as Scotland, Ireland and the Channel Islands.
The failure will affect not only the staff employed locally but also businesses that provide goods and services to the airline, a large number of which will be based in the south. The impact on the local economy could be significant as suppliers are likely to lose revenue and in all likelihood suffer a bad debt. Whilst some businesses will be able to absorb such losses it will nonetheless hit profits and cash flow hard, whereas others may not be able to weather the storm and we may see further failures in the coming weeks and months.
Sandra Mundy, Business Restructuring and Insolvency Partner, said: "the failure of Flybe is very distressing for the employees and affected businesses, sadly I do not think that this will be the only airline that will fail. Even prior to the coronavirus the airline industry has been facing pressures with rising fuel costs, green taxes, Brexit uncertainties and falling passenger numbers."