Flybe fully grounded?

The UK Civil Aviation Authority (CAA) has revoked Flybe's Operating Licence and Route Licences covering scheduled and charter operations.  This has been challenged by the administrator Ernst & Young (EY).

"There was no evidence of any current interest by any counterparty in the purchase of Flybe as an air carrier, or of Flybe remedying its financial problems within 12 months," the CAA said.

The CAA pointed out that any potential sources of funding for the airline, such as the sale of its slots at Heathrow or a Covid-related government bailout, were not relevant at the time of the hearing. The former of these measures "would not on its own put Flybe in a position to meet the relevant financial viability test," while a potential bailout was neither established by law nor certain to apply to Flybe.

"The Panel’s (Consumers & Markets Group of the CAA) task, however, was to apply the law as it currently stood (particularly in the EU Regulation). If there were a future rescue effort from the Government, it seems likely that airlines would have to apply on a case by case basis; there was no indication that any assistance would be forthcoming to an airline that was already in administration," the CAA argued.

"As such, there were no grounds to only suspend the operating licence, rather than revoke it completely, nor were there grounds to grant a Temporary Operating Licence (TOL) to the airline.”

EY has appealed to Grant Shapps, Transport Secretary, on the grounds that revoking the licence would hinder any sale of the business.  It claimed 20 interested parties.

www.caa.co.uk

www.ey.com

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OUR READERS' FINEST WORDS (All times and dates are GMT)

All comments are filtered to exclude any excesses but the Editor does not have to agree with what is being said. 100 words maximum

Ian Hamer, UK

It is hard to understand why the CAA has found it necessary to do this now. On the face of it there was no statutory requirement to do anything now. It appears that they have limited the Aministrator's ability to maximise any returns for creditors, staff and shareholders. It will be interesting to see if Grant Shapps can and will overturn the CAA decision.

Ian Hamer, UK

It is hard to understand why the CAA has found it necessary to do this now. On the face of it there was no statutory requirement to do anything now. It appears that they have limited the Aministrator's ability to maximise any returns for creditors, staff and shareholders. It will be interesting to see if Grant Shapps can and will overturn the CAA decision.

Graham Stephenson, UK

Flybe was a vital part of the British Economy linking areas that are difficult to reach in a day for medical and business purposes.