Brexit blamed for collapse of Flybmi airline

Brexit blamed for collapse of Flybmi airline
A Flybmi plane at Frankfurt International airport in Frankfurt am Main, Germany, 20 May 2018.

Brexit has been blamed for the collapse of a British airline, which has seen flights cancelled for hundreds of shocked passengers.

British Midland Regional Limited, which operated as Flybmi, announced on Saturday that it was filing for administration.

Some 1,500 passengers had been scheduled to fly with the airline yesterday. A total of 376 employees based in the UK, Germany, Sweden and Belgium are employed by Bmi Regional.

The East Midlands-based airline had operated flights on routes to 25 European cities, including Aberdeen, Bristol, Derry, East Midlands, London Stansted and Newcastle. It was claimed some passengers were still able to make bookings on Saturday, hours before the announcement of the collapse came.

A tweet from the airline a day earlier invited people to book a trip with Flybmi to Munich for winter sports.

Rory Boland, travel editor at Which?, said: “Some customers have claimed that tickets were being sold in the hours before the airline went bust, knowing full well those tickets would never be honoured, and passengers will rightly be outraged if this is proved to be the case.”

In a statement, the airline said difficulties which led to the collapse had included increases in fuel and carbon costs, and challenges “particularly those created by Brexit”.

It said: “The airline has faced several difficulties, including recent spikes in fuel and carbon costs, the latter arising from the EU’s recent decision to exclude UK airlines from full participation in the Emissions Trading Scheme. These issues have undermined efforts to move the airline into profit.

“Current trading and future prospects have also been seriously affected by the uncertainty created by the Brexit process, which has led to our inability to secure valuable flying contracts in Europe and lack of confidence around Bmi’s ability to continue flying between destinations in Europe. Additionally, our situation mirrors wider difficulties in the regional airline industry which have been well documented.

“Against this background, it has become impossible for the airline’s shareholders to continue their extensive programme of funding into the business, despite investment totalling over £40m (€45.6m) in the last six years.

“We sincerely regret that this course of action has become the only option open to us, but the challenges, particularly those created by Brexit, have proven to be insurmountable.”

One passenger said he had already gone through security at Bristol airport when his flight was cancelled, while civil engineer Danny McLaughlin, who lives on the Irish border, said it is the first direct effect of Brexit he has felt. He had 14 flights booked through his job over the next seven weeks between Derry and Stansted.

Just two days earlier, Transport Secretary Chris Grayling had announced the route between Derry and Stansted would be subsidised by the Government, in partnership with the Department for the Economy in Northern Ireland for another two years until May 1, 2021. Discussions are now underway to find an airline to operate the route, which is a public service obligation.

A DfT spokesman said: “We are fully focused on supporting those affected and are in contact with airports, airlines and other transport providers to ensure everything possible is being done to help them.”

Meanwhile, Airbus said it would have to make “difficult decisions” about future investment if Britain crashes out of the EU without a deal, adding it had already spent tens of millions of euros in preparations.

“There is no such thing as a managed no deal, it’s absolutely catastrophic for us,” senior vice president Katherine Bennett told the BBC.

“Some difficult decisions will have to made if there’s no-deal... we will have to look at future investments,” Ms Bennett said.

She said Airbus had already spent “tens of million of euros” on preparing for Brexit, for example on stockpiling parts and securing IT systems.

Press Association and Reuters

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