(Adds detail, background)
LONDON, Jan 13 (Reuters) - Flybe, the regional British
airline, is fighting for survival and the British government is
being called upon to help prevent a second airline failure in
less than six months, according to media reports.
Flybe, whose flights were operating as usual on Monday, said
it did not comment on rumour and speculation, while the
government's Department for Transport said it did not comment on
the financial affairs of private companies.
Sky News reported that Flybe bosses held rescue talks with
the government on Sunday as its fragile finances were hit by a
higher fuel price during the winter months when demand is lower
as fewer people fly.
Accountancy firm EY is on standby to handle the possible
administration of Flybe, added Sky. EY did not immediately
respond to requests for comment.
Should Flybe collapse, it would be the second high-profile
failure in Britain's travel industry in less than six months
after Thomas Cook went into liquidation last September,
stranding thousands of passengers.
Flybe has 68 aircraft and about 2,000 staff and was already
struggling when it was bought by Connect Airways, a consortium
created by Virgin Atlantic, Stobart Group and
investment adviser Cyrus Capital for $2.8 mln last year.
The new owners' turnaround plan involved providing a 20
million pound ($25.97 million) bridging loan facility and up to
80 million pounds of funding, but reports said more investment
was needed, pushing Flybe to the brink.
Flybe's fleet of small aircraft includes the Bombardier
Dash-8 Q400 which seats 77 passengers and connects regional
airports such as Exeter, where it is based, Birmingham and
Aberdeen to other British and European cities, as well as
operating flights from Europe's busiest airport Heathrow.
While demand for flights from airports such as Heathrow was
healthy, Flybe struggled to compete against road and rail
options on some regional flights, said analysts.
Ben Bradshaw, lawmaker for the opposition Labour party who
represents Exeter, said Flybe was important for British
connectivity.
"I would expect the government to work closely with its
management to secure the future of such a strategically
important business," he was quoted by local news provider
DevonLive as saying.
Flybe said in its statement: "Flybe continues to provide
great service and connectivity for our customers while ensuring
they can continue to travel as planned. We don't comment on
rumour or speculation."
($1 = 0.7702 pounds)
(Reporting by Sarah Young, Editing by Paul Sandle and Louise
Heavens)
