Flybe falls prey to coronavirus and 'stronger' airlines are likely to follow
Only five days ago, the boss of BA owner IAG warned that the coronavirus would push weaker airlines “over the edge”. Little surprise, then, that Flybe should be an early victim: a perennial struggler to turn a profit, flying routes that few others deemed commercially viable around the UK. But, even at such a geographical remove from the current outbreak, it is unlikely to be the last. For now, the effects of Covid-19 on airlines echo the pattern among the human population: standstill in China, tolerated by the stronger carriers abroad, but potentially fatal to those less robust. And Flybe’s pre-existing conditions included an unusually onerous tax burden of air passenger duty affecting domestic flights, dampened demand alongside Brexit, and increased fuel and leasing costs from a falling pound. Its investors had sensed a final opportunity after its share price had tanked; but by January they were begging the government, in vain, for assistance to stay alive. But other airlines are more directly exposed than Flybe to the crisis, first cancelling major Chinese routes and then seeing the drop in demand “rippling through” the global networks, as the IATA warned this week. Iata is in the process of quickly revising up its estimates, barely a fortnight old, of a $30b hit to revenues. No one knows, analysts and executives now say, quite how much this crisis is going to cost airlines. But many warn that it already looks worse for the industry’s bottom line than the aftermath of 9/11.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2020-03-05/unaligned/flybe-falls-prey-to-coronavirus-and-stronger-airlines-are-likely-to-follow
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Flybe falls prey to coronavirus and 'stronger' airlines are likely to follow
Only five days ago, the boss of BA owner IAG warned that the coronavirus would push weaker airlines “over the edge”. Little surprise, then, that Flybe should be an early victim: a perennial struggler to turn a profit, flying routes that few others deemed commercially viable around the UK. But, even at such a geographical remove from the current outbreak, it is unlikely to be the last. For now, the effects of Covid-19 on airlines echo the pattern among the human population: standstill in China, tolerated by the stronger carriers abroad, but potentially fatal to those less robust. And Flybe’s pre-existing conditions included an unusually onerous tax burden of air passenger duty affecting domestic flights, dampened demand alongside Brexit, and increased fuel and leasing costs from a falling pound. Its investors had sensed a final opportunity after its share price had tanked; but by January they were begging the government, in vain, for assistance to stay alive. But other airlines are more directly exposed than Flybe to the crisis, first cancelling major Chinese routes and then seeing the drop in demand “rippling through” the global networks, as the IATA warned this week. Iata is in the process of quickly revising up its estimates, barely a fortnight old, of a $30b hit to revenues. No one knows, analysts and executives now say, quite how much this crisis is going to cost airlines. But many warn that it already looks worse for the industry’s bottom line than the aftermath of 9/11.<br/>
