A British airline, Flybe, had been rejected £100 million loan to save itself from a collapse as the airline struggles with financial difficulties that was fueled on by the Coronavirus outbreak.
Struggling airline Flybe has already been in financial troubles before the outbreak when it started looking to the government to commit to helping the airline. Two months ago, the government announced a £100m loan agreement, thought to be in the shape of a delay in paying Air Passenger Duty (APD) for three years, that would keep the airline going. Its owners, Virgin Atlantic, Stobart Air and hedge fund Cyrus Capital, was also expected to inject capital into the airline to help it stay afloat as part of the deal.
A decision on the loan was due in February. But a delay has meant that it will unlikely to be made until next week.
However, it has been revealed that the airline has not met certain requirements set out by the government, the Financial Times reports, which means it might not be able to secure the loan next week.
The Coronavirus certainly made the situation worse as it has seen the drop in bookings like other major airlines around the world.
Flybe currently employs over 2,000 people and is the largest regional airline in Europe, serving around 170 destinations and has a major presence at airports such as Aberdeen, Belfast City, Manchester and Southampton. It flies the most UK domestic routes between airports outside London.
RIVALS RESPONSE
Rival Ryanair has predicted the drop in demand for flights due to the coronavirus will result in some European airlines failing in the coming weeks. In January, news that Flybe may benefit from government help, sparked a backlash from rivals. British Airways’ owner IAG has filed a complaint to the EU arguing Flybe’s rescue breaches state aid rules. While, EasyJet and Ryanair said taxpayer funds should not be used to save a rival.
The government’s proposal to cut Air Passenger Duty (APD), was also attacked by the rail industry’s trade body and climate campaign groups.
