Knowledge

Flybmi goes into administration

Flybmi, the British regional airline that operated short-haul flights, fell into administration on Saturday after being severely affected by ‘spikes in fuel and carbon costs’ due to uncertainty arising from Brexit.

In 2018, Flymbi ran 29,000 flights, with a total 522,000 passengers on its 17 Embraer planes. 376 staff are employment by the East Midlands based airline, which flew to 25 European cities, including Milan and Munich.

Despite urging customers to book flights on social media the day before its collapse, all Flybmi flights have been cancelled, leaving hundreds of stranded passengers to contact their travel agents, insurance or credit card companies directly, regarding what their next steps should be.

Airlines Ryanair and Loganair are moving quickly to take advantage of the abrupt collapse of Flybmi. While Ryanair’s Chief Operations Officer, Peter Bellew, put out a video stating that the airline would be ‘delighted’ to invite job applications from ex-Flybmi staff, Scotland-based Loganair is thought to be taking over five of Flybmi’s routes.

Loganair, which is owned by the same parent company as Flybmi, Airline Investments Limited, had been codesharing – an agreement where two or more airlines can place designator codes on a flight operated by another airline – on three Flybmi routes from Aberdeen to Bristol, Oslo and Esbjerg, and will continue the operations of these routes from the 4^th March 2019. In addition, the Scottish airline will take over Flybmi’s routes from Newcastle to Stavanger and Brussels as of 25^th March 2019.

Jonathan Hinkles, Loganair Managing Director, commented:

“The two airlines are separate businesses, operating separate aircraft fleets on their own distinct route networks. We are evaluating Flybmi’s wider network and assessing routes which align with Loganair’s distinct geographical area and overall strategic plans.”

Flybmi confirmed that they would be unable to repay customers for any cancelled flights and concluded in a statement:

“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.”

Flybmi is the latest in a series of European carriers who have fallen into administration, with Belgian carrier VLM going into liquidation in September 2018, followed by Nordic airline Primera Air and Cypriot airline Cobalt in October of last year.

How to liquidate your company in Scotland

Under circumstances where debt cannot be successfully repaid, liquidating a company can be a final option. There are three common types of liquidation in Scotland:

• Creditors’ Voluntary Liquidation (CVL),
• Members’ Voluntary Liquidation (MVL), and
• Compulsory Liquidation.

If the business is no longer viable and there is nothing to suggest an upturn in fortunes in the near future, a common route will be CVL. At this time, debts are often beginning to escalate, and the company cannot afford to pay them on time, or it has more liabilities than assets.

If the company’s debts can be repaid within a year through the sale of company assets, then an MVL would be the appropriate choice. They are often used as a method of restructuring or reorganising within the company and can allow shareholders to realise any interest in the firm.

Lastly, an enforced action from unhappy creditors can occur, known as compulsory liquidation. Being served with a winding-up order is a severe action, and you must seek professional legal advice from a qualified debt recovery lawyer.

Contact our Debt Recovery Solicitors Glasgow, Edinburgh & Dundee

If your company is considering the liquidation process, you need to speak with an expert debt recovery specialist. Contact Yuill & Kyle solicitors today for first-class legal advice via the online enquiry form.