Flybe Back!

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Last Updated: 20 Feb 2024

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Is Europe’s Largest Regional Airline About to Take Off Again?

The collapse of Flybe, in March 2020, was a sad time for its hard-working staff and the communities it served.  However, The Telegraph reports that it could soon be making a dramatic return to the runway.  Its new owner, Cyrus Capital,  has filed an application to the CAA for a UK operating licence.  The Reward Flight Finder team is watching this story closely since Flybe was formerly a significant member of the Avios points programme.  

The demise of Flybe significantly reduced the options, for both earning and redeeming frequent flier points, on routes from UK regional airports. But might the return of Flybe signal a reward flight renaissance for passengers travelling via the cities of Great Britain?

 

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The Flybe Story

Flybe is an airline with a turbulent, yet significant, history.  Whilst many small European airlines have failed, after only a few years in the air, Flybe survived for 41 years. It repeatedly reinvented itself, surviving numerous industry crises.  In fact, it grew to become the largest regional airline in Europe.

Flybe was formed, as Jersey European Airways, in November 1979, after the merger of two small cross-channel airlines, Intra Airways and Express Air Services. In 1985 it amalgamated with Spacegrand, an airline operating from Blackpool Airport, in the north-west of England.  Despite expanding the destinations it served, within the British Isles, the company retained the Jersey European brand, moving its headquarters to Exeter Airport, in Devon.

Jersey European built a strong reputation with passengers and it continued to expand, establishing itself as a popular UK domestic airline. In 1997 it launched flights to Paris, in partnership with Air France, the airline’s first venture into continental Europe.  

 

 

Over the next three years, Jersey European extended its flight map, across the continent. So in June 2000, it was rebranded as British European (BE).  The new name was not without controversy, since another airline, British European Airways (BEA) had previously been in operation from 1946, until its 1974 merger with BOAC, becoming British Airways.  British European had no connection with BEA, but it had aspirations to compete with BA, under its new name, introducing bigger aircraft and full cabin service.  Sadly, British European’s aspirations to go head-to-head, with its larger UK based rival, were short-lived.

The global decline in air travel after 9/11, combined with the BSE “mad cow disease” crisis in the UK, contributed to British European losing £30m in two years. So, in 2002, the airline restructured its operations and changed its name once again: Flybe was born. 

Under the Flybe brand, the company once again focussed on low-cost regional operations. It also emulated the new-breed of low-cost carriers, such as Ryanair and EasyJet, by investing in Internet booking technology to encourage direct, online bookings. The new model seemed to work and in 2007 Flybe acquired BA Connect, British Airways’ regional subsidiary. The acquisition established Flybe as the largest regional airline in Europe.

Buying BA Connect also made Flybe an attractive proposition for a whole new audience of travellers.  It’s regional network was now able to offer convenient transfers, to and from numerous international flights, operated by British Airways and its Oneworld partners. It gained slots at both London Heathrow Airport and Manchester Airport. Then, in 2014, Flybe introduced flights, connecting with BA schedules at London City Airport. 

 

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Flybe and Avios

Despite being a low-cost carrier, Flybe offered a loyalty scheme, called Rewards4All, for several years. Then in 2014, it announced the closure of Rewards4All, replacing it with the IAG-owned Avios programme.  This meant Flybe became part of the same mileage points scheme as British Airways and its IAG sister airlines, Iberia and Vueling.  

The decision was clearly aimed at helping Flybe cash in on its new, synergistic relationship with its erstwhile rival, British Airways. At the time, Saad Hammad, CEO of Flybe, pointed out to investors that, “There are 2 million customers, with billions of Avios points, within thirty miles of a Flybe airport.”   IAG trumpeted the announcement too, declaring that: “Our members will benefit from access to even more reward flights and on new regional routes, as well as the new opportunity to collect Avios points when flying with Flybe.”  Buoyed by the possibilities of its new partnership, Flybe expanded again, launching a new UK shuttle route, connecting Jersey, Southampton, Leeds Bradford Airport and Aberdeen with a multi-stop service.

But behind the scenes, all was not well. Several industry observers questioned Flybe’s decisions when it came to its fleet, fuel arrangements and financing. Many feared its expansion came at too high a price. Simultaneously, the airline got drawn into price competition with both low-cost carriers and rail operators. It became embroiled in a destructive fight with Scottish competitor Loganair for domestic routes. Its focus also shifted away from promoting Avios, away from connecting international travellers and towards deeply discounted domestic leisure fares.  In 2016, the Brexit vote created further economic uncertainty and by 2018 Flybe was in trouble and up for sale.

Back in 2014, Flybe had strategically aligned itself with both British Airways and Avios. But by 2018, its financial concerns had pushed it towards a new partner: Virgin Atlantic.  Virgin realised that its lack of a UK and European network put it at a strategic disadvantage versus BA. It had previously launched its own UK domestic airline, Little Red, but that venture had ended in tears. Rumours of talks between Flybe and Virgin soon began to circulate. Then in early 2019, things became official. Flybe was bought by Connect Airways, a consortium of Stobart Air, Cyrus Capital and Virgin Atlantic.  

Since the plan was for Flybe to rebrand as a Virgin airline, Flybe’s partnership with Avios became untenable. It could hardly remain a member of a mileage programme owned by Virgin Atlantic’s largest home-based rival. So Avios and Flybe parted company with the latter officially leaving Avios at the end of April 2019. 

 

Could Flybe become an Avios Partner Again?

Despite the many other problems at Flybe, its Avios partnership had attracted a number of frequent fliers to the airline who may not otherwise have flown with it.  In the end, the Virgin rebrand never happened. The Coronavirus pandemic was the final nail in the coffin for Flybe, it entered administration in March 2020 after the UK government refused to bail it out.  The impact of COVID-19 on air travel had also hit Virgin Atlantic hard, meaning it was in no position to pick up the pieces either, even if it wanted to. 

It appeared that, after over 40 years, Flybe had reached the end of the runway. But in October 2020, another Connect Airways partner, Cyrus Capital made its move.  It created a shell company called Thyme Opco, which in turn bought the Flybe brand and some of its other remaining assets, from the administrator. Now Thyme Opco has applied for an operating licence and announced that it plans to relaunch Flybe, initially as a smaller airline, but with an aspiration to restore regional air connectivity to the UK.

With Virgin Atlantic, no longer part of the immediate plans for Flybe, the primary barrier to the airline rejoining Avios, or indeed another airline alliance, has disappeared.  So could Flybe become an Avios partner once more?  Maybe. What’s certain is that the team at Reward Flight Finder will let you know more as soon as they hear what lies in store for Flybe, the plucky British airline that refuses to stay grounded.

 

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