WOW! What is happening to low cost airlines? Since August 2017, a number of companies have flown their last flight: Monarch, Azur, Air Berlin and WOW to name a few; and now FlyBe have declared cutbacks.
5 days ago, news came in that Flybe had cancelled dozens of flights from across the country but primarily departures from Belfast and Birmingham. This was then followed with news of job cuts to a range of airports across the country; Exeter, Doncaster, and Norwich would suffer, while also all flights from Cardiff were ending. As the week progressed, more justifications came forward, and apparently taxes were to blame for these cutbacks. According to Christine Ourmieres-Widener, the chief executive, Air Passenger Duty (APD) was the reason they had to decrease. The Cardiff site had tried to challenge these taxes as APD adds £26 to the cost of a domestic return ticket but due to concerns of unfair advantages, this was not granted. The chief executive of Bristol Airport stated that cutting this tax for Cardiff would mean that more than a million passengers would fly from Cardiff Airport rather than Bristol. It doesn’t help that the bigger airlines have also been surpassing the smaller carriers; Ryanair and Easyjet have been apprehending what was Flybe territory and bringing in their own larger, faster planes and undercutting Flybe on prices.
However, back in January it was reported that Virgin Atlantic, Stobart Air and Cyrus Capital Partners will bail them out. Virgin will be rebranding and repainting 78 of the Flybe planes and using them for long-haul flights from Heathrow and Manchester; whereas Stobart Air intend to boost their own flights from Southend, and Carlisle. CCP is a hedge fund operation that will probably sell their 40% share if and when the airline value increases.
It’s not all bad news though; things are taking off for Wizz Air. They recently announced profits up to €300 million and their shares rose by 4.8%. This puts them at a company value of around $2.9 billion. This coupled with new routes to London Gatwick and Oslo; they have now added a daily service from Budapest to Gatwick and a third operation connecting the Hungarian capital to the Norwegian capital.
So maybe it’s not all bad news, maybe the big boys aren’t creating a monopoly on every flight, maybe there is some room on board for the smaller airlines.