Airline files for bankruptcy, cancels all flights

Flybmi, a European regional airline formerly known as British Midland Regional has filed for bankruptcy and cancelled all flights.

The company, based at the East Midlands Airport in central England was a partner airline to Lufthansa, Air France and other major European airlines. Flybmi employed 376 staff, operated 17 planes and offered regularly scheduled flights to 25 European cities.

In a written statement on the company’s website, a Flybmi spokesperson said : “It is with a heavy heart that we have made this unavoidable announcement today. The airline has faced several difficulties, including recent spikes in fuel and carbon costs. These issues have undermined efforts to move the airline into profit.”

The statement continued, “Current trading and future prospects have also been seriously affected by the uncertainty created by the Brexit process, which has led to our inability to secure valuable flying contracts in Europe and lack of confidence around Flybmi’s ability to continue flying between destinations in Europe.“

“Against this background, it has become impossible for the airline’s shareholders to continue their extensive program of funding the business, despite investment totaling over £40m ($60mil) in the last six years. We sincerely regret that this course of action has become the only option open to us, but the challenges, particularly those created by Brexit, have proven to be insurmountable.

Passengers who booked their flights though a travel agent holding an Air Travel Organiser's Licence (ATOL) should contact the agent for assistance in booking replacement flights and refunds.

Passengers with air travel insurance that includes Scheduled Airline Failure Insurance (SAFI) should contact their insurers.

Passengers who bought tickets directly from BMI via credit or debit card should contact their card issuer.

Flybmi began life as Business Air in 1987 before becoming part of the British Midland International group in 1998. The company left the British Midland umbrella in 2012 when purchased by Airline Investments Limited (AIL). Named the most punctual scheduled airline in the UK in 2014, the company rebranded to Flybmi in July, 2018.

Flybmi flew from six of the UK’s second-tier airports, including Stansted in east London. Last year the airline ran 29,000 flights to destinations throughout Europe, carrying 522,000 passengers.

British Airline Pilots' Association (BALPA) general secretary Brian Strutton said: "The collapse of Flybmi is devastating news for all employees. Regrettably BALPA had no warning or any information from the company at all. Our immediate steps will be to support Flybmi pilots and explore with the directors and administrators whether their jobs can be saved."

Travel expert Simon Calder told BBC News it had been an "extremely difficult winter" for many airlines.

"Small airlines which do not have the weight of their bigger rivals are particularly vulnerable," he said. "There are simply too many seats and not enough people."

In recent years Alitalia, Air Berlin and Monarch Airlines have all filed for administration. At the time Monarch’s insolvency in 2017 was the largest collapse in UK aviation history. At that time Michael O’Leary, CEO of competitor airline Ryanair predicted that only a small number of airline groups would survive to ply the European air market in the coming years.

“Europe will consolidate in the same way as the North American market has,” O’Leary told Reuters.

A spokesman for the UK’s Department for Transport (DfT) described the situation as "very disappointing" and said the government was focused on supporting passengers who had been affected by the airline’s sudden closure, particularly those stranded across Europe who had lost their flights home.

The DfT had only just announced on Thursday the extension of a contract with Flybmi for a subsidized service between London Stansted and Derry (Northern Ireland). At that time Karen Bradley, the UK’s Secretary of State for Northern Ireland hailed the announcement as “Hugely welcome and vital for the continued economic growth of Northern Ireland.” Thus far the minister has declined to comment on Flybmi’s collapse.

This is a developing story and further information will be added when available.

(Image courtesy Flybmi/UK Department for Transportation)