Coronavirus slump 'could force Flybe collapse', government warned

Tom Belger
Finance and policy reporter
Flybe has struggled to stay afloat. (Pro Shots/Sipa USA)

UK regional airline Flybe has reportedly warned the government it could collapse within days because of a slump in bookings brought about by the coronavirus crisis.

The domestic carrier, which was saved from collapse earlier this year, has urgently asked the government for more money, according to ITV News.

Flybe could fall into administration within days, but “last minute” talks with shareholders and the government were ongoing, Sky News reported.

A spokesperson for Flybe declined to comment when contacted by Yahoo Finance UK.

The department for business, energy and industrial strategy (BEIS) also declined to comment. A government source called the reports “pure speculation.”

One source with knowledge of the negotiations told Yahoo Finance UK talks had been held recently between Flybe’s leadership team and the government. 

Flybe is said to have been pushing for a £100m ($128m) loan, as well as further tax relief on air passenger duty in the government’s Budget next week.

But the source appeared to play down reports the request had been declined, saying there had not yet been a “fixed outcome.”

Read more: Ryanair threatens legal action against UK government over Flybe bailout

Flybe serves around 170 destinations and has a major presence at UK airports such as Aberdeen, Belfast City, Manchester and Southampton. It flies most UK domestic routes between airports outside London.

The airline was thought to have negotiated an extension on more than £100m in unpaid air passenger duties in January, but Flybe said it had agreed a payment plan for a debt of “less than £10m.”

With additional reporting from Tom McArthur