British airline Flybe has officially collapsed, announcing that all of its flights will be grounded starting this week. The company announced on Thursday that its business in the UK has officially halted and that trading of its stocks will be stopped effectively immediately.
In a statement addressed to its customers, Flybe advised people with tickets to immediately seek alternative flights. It disclosed that it will not be able to assist passengers in doing so as it enters administration.
The collapse of the UK airline based in Exeter, England, is the latest victim of the ongoing slump in the demand for international flights brought about by the continued spread of the novel coronavirus. The company was already struggling prior to the epidemic, with the outbreak managing to simply deal the final blow.
In January, the UK government attempted to intervene and approached the company to discuss a possible rescue plan. The airline's management and shareholders had previously stated that they were setting up their own recovery plan to bring the company back to profitability.
Unfortunately, the spread of the viral disease compounded the airline's financial challenges, effectively bringing it to its knees. The airline acknowledged this in a statement to the media, explaining that the epidemic had a significant impact on its business and overall demand.
The UK airline, which was originally founded in 1979, was once Europe's largest independent regional airline. During its peak, the company ferried more than 8 million passengers annually over more than 200 international and domestic routes.
Flybe has become the latest victim in the ongoing crisis plaguing the entire global airline industry. The continued spread of the virus has resulted in a significant drop in demand for travel, forcing some airlines to ground plants, cut flight schedules, and lay off workers.
According to the International Air Transport Authority (IATA), the spread of the disease is expected to costs the global airline industry around $113 billion in sales. The figure, which was announced on Thursday, is significantly higher than the agency's previous forecast of $30 billion.
IATA regional vice president, Rafael Schvartzman, mentioned in a statement that Flybe's collapse should be proof enough that action is required to safeguard Europe's air connectivity.
UK officials however argued that Flybe's financial issues predates the spread of the virus. Nevertheless, the government is apparently prepared to take action, explaining that it is currently working with industry players to minimize the disruption caused by Flybe's collapse. This includes looking into possibly reestablishing routes that are not already covered by other airlines.
