Flymaybe no more

Well, Coronvirus strikes! It has not killed anyone yet int he Uk but has taken a corporate victim. Flybe was in a poor state anyway, needing tax holidays and more investment to try and keep going but the collapse in bookings has done for it.

I hope that there is a chance of a phoenix rising from the ashes to take over the profitable routes (hmm, are there any I wonder) and slots to try and keep the regional air capacity going. However, with the virus about to hit I think this is unlikely and a decision by a Private Equity house would be needed in the next day or two. So sadly, a wind down and sell-off is most likely.

That means the more likely scenario is a bunch of small start up's trying to cherry pick routes and lease planes for the forseeable in the regions - so in the short terms there will be a big undersupply, especially with the virus putting off new entrants.

This may well impact on ariport viability - perhaps here the Government should step into at least help with the costs of mothballing facilities for a a few months until some more services start running again.

In the medium term, trying to be optimisitc, we might find that Flybe's oligopolistic position was the cause of its donwfall. More nimble and smaller suppliers who do not try to create demand but to service it might mean we end up with leaner routes but better services. I can see it being more pricey as after all Flybe was losing money hand over fist as a company so something was wrong with with the financial model (sometimes of course this is just debt loads after long-term mismanagement).

Plus, having flown Flyeb a few times, the abysmal customer experience surely can't be hard to improve on for any new entrant.

It will be interesting to see the capitalist response to the demise of Flybe.

Last rights for FlyMaybe?

It has been a long time coming, the demise of Flymaybe (indeed that has been its nickname for several years now, a nice mix of the threat of coporate collapse and poor service in one handy monicker).

Last year Virgin Atlantic stepped in for some reason lost on me and apprently has spent £100 million of Private Equity money trying to turnt he airline around. 

Alas, it seems to haev failed. For me though the heroic nature of Flybe's fall has some great angles. 

For example, it tried to corner the Hebrides business in Scotland and outcompete Logan Air. It leased expensive planes, bought landing slots and went for it. All at a massive loss. But who sat down and decided that was there world domination strategy, what next, the inter-Ireland market? 

Really, what a terribly run business by the management. Of course, the usual suspects when it comes to airline issues are alive as ever. Out of date IT which means ticketing costs more that it should and scheduling is slow so aircraft don't turnaround quick enough to generate more revenues. Plus the price of oil moving around and a weak pound sliced into margins. Finally of course, the big boys like easyjet just cherry pick the goo routes and effectively have Flymybe as a free test bed for them to see what shorthaul is working. 

Ouch, I can't see it being rescued this time and instead a period of administration and trying to be reborn with out its debt might prove the solution. 

As ever in the airline industry the saying remains true - how do you make millions in the airline business, start with billions....