UK budget airline Flybe in rescue talks

[LONDON] Troubled British no-frills airline Flybe has held crunch talks with the UK government over a potential rescue, a source close to the company told AFP on Monday.

Officials from the Department for Business, Energy and Industrial Strategy and the Department for Transport held weekend discussions about emergency funding, according to Britain's Press Association news agency said.

Flybe, based in Exeter in southwest England, employs about 2,000 people and is owned by a consortium led by Virgin Atlantic.

It carries around eight million passengers annually and flies to 170 destinations around Europe from its British hubs.

The loss-making carrier was a year ago bought by the 'Connect Airways' consortium, which also comprises infrastructure specialist Stobart and investment firm Cyrus.

However, Flybe, which said on its Twitter feed it would not comment on what it termed rumours or speculation, has since failed to recover in the face of weak consumer demand, fierce competition and a slowdown in Britain's Brexit-facing economy.

Although the United union urged action, the government made no comment but the consumer association Which? suggested that customers were very concerned over the airline's future.

Smaller airlines are also more exposed to volatile fuel costs and a struggling pound than their larger rivals.

Should it collapse into bankruptcy, Flybe would become the second British airline to do so in the last four months after the demise of holiday giant Thomas Cook in September.

Diana Holland of Unite said she hoped the government would intervene to show it had learnt the "lessons" of the collapse of another airline, Monarch, in 2917 as well as Thomas Cook.

Last February, British regional airline flybmi also went bankrupt, blaming high costs and Brexit turmoil.

Brian Strutton, general secretary of the British pilots' union Balpa, said he was worried about the carrier's future and potential job losses.

Aviation analyst John Strickland told PA that if Flybe does fail it would have a "significant impact" on several regional airports the company uses, notably Exeter and Southampton in the southwest and south.

But he forecast that government assistance would not likely be forthcoming.

Lawmaker Stephen Farry, who serves a constituency in Northern Ireland, said he feared that if Flybe disappears that would hit connectivity between the province and Britain and he would be taking the matter up with the UK's Department for Business.

AFP