Southwest said Thursday it expected a hit of up to $300m to its first-quarter operating revenue from the new coronavirus outbreak, prompting it to cut its quarterly revenue outlook. Shares of the company fell 3%, while with those of bigger rivals fell more. Southwest said it has seen a significant rise in ticket cancellations and decline in traffic because of the outbreak, which has killed over 3,000 people and caused airlines across the world to cut flights and implement cost controls. Southwest CE Gary Kelly said at an industry conference in Washington the company had not decided whether to cut its schedule but said that reducing prices would not address consumer fear. “We could discount prices tomorrow and it wouldn’t do any good,” Kelly said. Kelly told CNBC-TV that the decline in air travel demand felt more driven by fear, similar to the aftermath of the Sept. 11, 2001 hijacked plane attacks.<br/>
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Back in January — as the government scraped together a rescue package for Flybe — transport secretary Grant Shapps declared that Europe’s largest regional airline would continue to keep the regions connected “for years to come”. For Flybe’s 2,400 staff — and thousands of customers — that promise now rings hollow. By Thursday morning, just hours after the airline collapsed, ministers were striking a very different tone. “Unfortunately, in a competitive market, companies do fail, and it is not the role of government to prop them up,” pronounced Kelly Tolhurst, the aviation minister. Industry sources suggest that ministers’ enthusiasm for saving Flybe gradually diminished as the talks progressed. Tolhurst was tasked with taking questions from multiple MPs concerned about the impact of the bankruptcy on their own constituencies. Many pointed out that Boris Johnson’s administration had repeatedly vowed to improve “regional connectivity”: so why had it let the company — which provided 40% of domestic regional flights — been allowed to go bust? Arlene Foster, leader of Northern Ireland’s Democratic Unionist party, called the collapse “a big test for [government] commitment to UK regional connectivity”.<br/>
The pensions of workers at collapsed airline Flybe are at risk after it emerged they have no protection under the UK’s lifeboat scheme, the Pension Protection Fund. Around 1,350 of the airline’s employees and former employees are in the British Regional Airlines Group (BRAG) pension scheme, which is based in the Isle of Man, outside of the PPF’s jurisdiction. The pension fund may not have enough cash to cover all of the payments promised to workers at Flybe. The last reported valuation of the scheme in 2018 revealed it had liabilities of GBP170m and an overall deficit of GBP11.6m. Usually, with pension schemes in the UK, employees qualify for 90% protection from the PPF if their company is declared insolvent, while retired members are 100% secure. Steve Webb, partner at pension consultants Lane, Clark & Peacock said: “It is a devastating blow to Flybe workers not only to lose their jobs but potentially part of their pensions as well. The creation of the Pension Protection Fund was designed to stop this happening, but the Flybe case shows that there are still gaps in the safety net.”<br/>