Flybe’s bleak future not a good sign for low-cost carriers

WHILE legacy airline British Airways (BA) trumpeted impressive results this past week, Flybe is going down the same path that Ryanair took. (See IAG’s performance augurs well for industry, Nov 12, 2013, and Can Ryanair change to be less macho? Sep 21, 2013.) Interestingly, Flybe is 15-per-cent-owned by the International Airlines Group (IAG), the parent of BA, Iberia and Vueling.

Courtesy Reuters/David Moir

Courtesy Reuters/David Moir

Flybe’s passenger carriage has been flat and profit after tax turned into a loss for the last couple of years (the year ending 31 March). It incurred a loss of GBP6.4m (US$10.3m) in 2012, which deteriorated to GBP 41.8m.

The airline, which is headquartered in Exeter, Devon in England, planned to close six bases and reduce staff numbers. Chief executive Saad Hammad said: “I know that these proposals are creating great personal uncertainty, but they are necessary to secure a long-term future for Flybe.”

Considering how European carriers such as Air France-KLM, Lufthansa and Iberia – are continually taking measures to reduce staff numbers, it points to the redundant weight those carriers are carrying in better times that are incommensurate with increased competition and a changing environment.

If there are any mixed signals from the different performances reported by BA and its less profitable rivals, this may point to a recovery in premium travel and the converse saturation of the low-cost market restricted by the small hinterlands. Flybe planned to close its bases at Aberdeen, Guernsey, Inverness, Isle of Man, Jersey and Newcastle.

So if BA chief Willie Walsh and Ryanair boss Michael O’Leary appeared to be talking at cross purposes, it could be that the two honchos, who are known not to see eye-to-eye on several issues, were operating in different worlds.


About Dingzi
Writer by passion, with professional expertise in aviation, customer service and creative writing. Aviation veteran, author, editor and management consultant. Besides commentary on business issues and life-interest topics, travel stories and book reviews, genres include fiction, poetry and plays. Nature lover who abhors cruelty of any form to animals, and a tireless traveler. Above all, a dreamer.

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