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Saturday, May 30, 2020

Government in talks over state acquisition of Flybe: CityAM

The collapsed administrator of Flybe airline, EY, has denied reports that he is in talks with the government to purchase the regional airline for bankruptcy to protect the UK’s spoiled sector.

According to the Telegraph, the Big Four’s auditor initiated talks with government officials on the nationalization of the airline in order to serve the UK’s loss-making regional routes.

Read more: Coronavirus: UK airlines ask the government to waive regulatory fees

However, EY said that these talks do not take place. A spokesman said: “At this time, we can confirm that there is no discussion between joint administrators and the government about eliminating Flybe from insolvency.”

He added that “it continues to be open to approaches from all sides in order to make returns for creditors.”

Flybe collapsed in early March after failing to obtain a state loan that would allow him to continue flying.

Virgin Atlantic, which was part of the airline in a consortium with Stobart Aviation and Cyrus Capital, declined to add more money to the airline because of the damage the coronavirus has done to its business.

The ensuing fallout of the coronavirus epidemic, which paralyzed global aviation, has resulted in a number of airlines calling for state aid to protect it from the threat of collapse.

A group representing some 2,500 Flybe employees forced to quit due to the collapse of Europe’s largest regional airline wrote to the chancellor last week asking him to act so he can access the government’s wage regime with workers in pension.

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Talks come as business secretary Alok Sharma announced that insolvency rules would be relaxed throughout the crisis in order to maintain as many commercial transactions as possible.

The legislation, which will be backdated in early March – Flybe collapsed on March 5 – will allow companies to “emerge intact on the other side of the Covid-19 pandemic.”

UK airlines were among the hardest hit by the crisis, but suffered a severe blow last week when Chancellor Rishi Sunak announced that they could only access state aid as a “last resort”.

Read more: Virgin Atlantic is preparing to ask for the bailout of the government

In a meeting with the transportation selection committee, transportation secretary Grant Shapps said negotiations were ongoing with individual airlines on a case-by-case basis, refusing to exclude the government that participated in certain carriers.

Flybe co-owner Virgin Atlantic is reportedly in talks with officials over a package of commercial loans and guarantees for hundreds of millions of pounds.

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