4th Mar 2020 14:43
(Alliance News) - Embattled Flybe has warned the UK government that it could be days from collapse amid a sharp fall in bookings due to the coronavirus, Sky News reported on Wednesday.
Separately, the Financial Times on Wednesday reported that the company's GBP100 million rescue package is set to be rejected.
Flybe, is owned by Connect Airways, a joint venture among Stobart Group Ltd, Virgin Atlantic and investment adviser Cyrus Capital Partners.
Sources told Sky News that Flybe could slip into administration, though discussions between Flybe's shareholders and the government are continuing.
https://news.sky.com/story/regional-airline-flybe-in-last-ditch-talks-to-avert-collapse-11949393
The struggling airline in January said it is seeking a state loan and was granted a tax holiday.
"We are in conversation with the government around a financial loan – a loan, not a bailout – a commercial loan, but that is the same as any loan we'd take from any bank," Managing Director Mark Anderson said in a message that was initially reported by the BBC and confirmed to AFP.
He added: "The government will not lend if they do not believe there is a credible plan. No-one is going to throw good money after bad."
Insiders told the Financial Times that the loan did not meet UK government criteria.
https://www.ft.com/content/6c37bb36-5df8-11ea-b0ab-339c2307bcd4
Flybe in January added that its tax break agreement will only be temporary, and it will pay all levies in full.
Flybe explained: "A payment plan was agreed with HMRC for a debt of less than GBP10 million.
"This is a standard time to pay arrangement with HMRC that any business in financial difficulties may use."
Shares in Stobart Group were down 3.2% at 78.20 pence each in London on Wednesday afternoon.
By Eric Cunha; [email protected]
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