FlyBe - A Summary Of A Self-Serving Bailout

The UK Government has bailed out the debts of failing airline FlyBe.

One must ask why. Many, of course, defend this course of action as they claim FlyBe is vital to a 'resurging regional economy'. That raison d'etre will not wash.

FlyBe is wholly owned by a Luxembourg based consortium, It's no longer British.

The simple - and urgent - conclusions here are these :

  • If the routes are economic ; then clearly FlyBe, allowing themselves to get into such debt, are not a competent company to operate the routes efficiently.
  • If the routes are uneconomic, but vital ; then clearly ongoing state aid is required - and that criteria, applied here, must be applied to all forms of transport.

That latter actually sounds a bit like a Socialist Policy of which we would approve..

What happens the next time FlyBe get into debt ? Another rescue package ? And another ? And another ?

So why are the UK Govt funding ? Because the owners, Connect, and their subsequent investors, are donors to the Tories.

There are also suggestions (to be confirmed) (now confirmed) that part of Connect Consortium is owned by a Gibraltar Trust (notice how tax havens keep cropping up?) in which various Tory MPs have investments.

Nadhim Zahawi
Nadhim Zahawi is a key one. And he's the Secretary of State for Business and Industry.

The Gibraltar Trust is called Balshore Investments. Nadhim Zahawi has not declared this interest in this Trust, no paid tax on it's income.

Balshore also own a big chunk of .. wait for it ... YouGov Polling, who's reports are notoriously and routinely tilted towards the #Tories.

Brexit ...

And by the way, Brexit IS INDEED a factor here.

Company documents from 2018/2019 state that FlyBe were hedging for future fuel costs in $USD. Most of the airline industry were doing the same. FlyBe didn't do it very well.

In that period, thanks to Brexit, the £GBP near-but collapsed to just above $USD parity - increasing fuel costs for FlyBe.

For all UK airlines, the Brexit-driven pressure on the £GBP is having a crippling effect. FlyBe have shown themselves to be the least competent in handling it, and that reason, cannot stand, economically, on it's own feet.

Aviation fuel is priced worldwide in $USD. In a market with fluctuating currency rates, airlines need to hedge to protect themselves. FlyBe hedged the wrong way, and were caught out by the Brexit-driven £GBP collapse.