Mon, 19 Aug 2019

Brexit uncertainty leads to UK airline ceasing operations

By Jay Jackson, Montreal News
17 Feb 2019, 17:21 GMT+10

LONDON, UK - The UK has been rocked by the apparent failure of 32-year old regional airline flybmi which ceased operations on Saturday and filed for administration.

Citing the uncertainty over Brexit and higher fuel prices, the airline's closure results in 376 staff members losing their jobs.

The company, estabished in 1987 in the East Midlands area had seventeen planes and serviced routes to and from Aberdeen, Bristol, Brno, City of Derry, Dusseldorf, East Midlands, Esbjerg, Frankfurt, Hamburg, Jonkoping, Karlstad, London Stansted, Lublin, Milan Bergamo, Munich, Newcastle, Norrkoping, Nuremburg, Oslo, Paris Charles de Gaulle, Rostock/Laage, Saarbrucken and Stavanger.

The airline, whose formal name is British Midland Regional, carried 522,000 passengers on 29,000 flights in 2018.

"It is with a heavy heart that we have made this unavoidable announcement. The airline has faced several difficulties, including recent spikes in fuel and carbon costs, the latter arising from the EU's recent decision to exclude UK airlines from full participation in the Emissions Trading Scheme," a spokesman for the airline said Saturday.

"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."

"These issues have undermined efforts to move the airline into profit. 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. Additionally, our situation mirrors wider difficulties in the regional airline industry which have been well documented," the flybmi spokesman said

"Against this background, it has become impossible for the airline's shareholders to continue their extensive programme of funding into the business, despite investment totalling over £40m 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."

"Our employees have worked extremely hard over the last few years and we would like to thank them for their dedication to the company, as well as all our loyal customers who have flown with us over the last 6 years," the flybmi spokesman said.

People who booked directly with the airline and are holding tickets for future travel have been asked to contact their card issuer to seek a refund.

Passengers who booked via a travel agent or one of flybmi's partner airlines should contact them to see what their options are, the airline said on its website.

Those with travel insurance should see if they are eligible to claim for cancelled flights.

The UK Civil Aviation Authority issued a statement Saturday clarifying options flybmi cusomers have.

"If you booked directly with British Midland Regional (flybmi) and paid by credit card you may be protected under Section 75 of the Consumer Credit Act 1974 and should contact your card issuer for further information.  Similarly, if you paid by debit or charge card you should contact your card issuer for advice as you may be able to make a claim under their charge back rules," the CAA sgtatement said. 

"If you purchased travel insurance that may include cover for scheduled airline failure, known as SAFI, you should contact your insurer.  If you did not book directly with British Midland (flybmi) and purchased your tickets through an intermediary, you should contact your booking or travel agent in the first instance."

Negative response letter

"Passengers who booked directly with the company via either a credit, charge or debit card may alternatively be able to make a claim against their card provider. Some card providers will ask for a negative response letter confirming the position. Passengers may also be able to make a claim against their travel insurer," the CAA said.

Direct booking with an airline

"If you paid the airline directly by credit card you might be protected by Section 75 of the Consumer Credit Act 1974. You should check with your card issuer for further advice. You may have similar cover if you paid by Visa debit card and should check with your bank."

Booked through an Airline Ticket Agent

"If you booked your ticket through an airline ticket agent you should speak to the agent in the first instance; they may have provided travel insurance that includes Scheduled Airline Failure cover," the UK Civil Avaiation Authority statement said.

Scheduled Airline Failure Insurance (SAFI)

"Some airlines and airline ticket agents will offer customers either a specific Scheduled Airline Failure Insurance (SAFI) policy or include similar protection within a broader travel insurance product. The type of protection provided may vary depending on the type of policy taken out. A policy may simply cover the cost of the original tickets purchased or any unused portion, or the additional cost of purchasing new flights, such as new tickets for travel back to the UK."

Booked with an ATOL holder (Package Holiday)

"If you have booked flights or a trip that includes flights with a travel firm that holds an ATOL (Air Travel Organiser's Licence) and received confirmation that you are ATOL protected, the travel firm is responsible for your flight arrangements and must either make alternative flights available for you so that your trip can continue or provide a full refund. If you are abroad, it should make arrangements to bring you home at the end of your trip. Contact the ATOL travel firm for more information," said the UK aviation regulator.

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