What could happen if Flybe went bust

Last week the Flybe CEO stated that unless the airline was sold then it would be wound up. With shareholders launching a legal challenge to the only confirmed bid so far, from the Virgin and Stobart Air bid, this possibility is possible, however in my opinion very unlikely, so what could happen if Flybe was wound up.

An Increase in domestic flight prices

With Flybe being one of the largest players in the UK domestic market, their collapse would lead to a large drop in competition on domestic flights. British Airways and easyJet the other two largest players in the domestic market would use this increased demand as an opportuinity to increase prices and therefore profits. The biggest price increases would probably occurr on routes operated from secondray airports not to London, due to the lesser competiton on these routes, and their reliablility on Flybe operating them. 

Job cuts at smaller airports

There are multiple airports that are highly reliant on Flybe's operations from them. Airports like Belfast City, Cardiff, Doncaster Sheffield, Exeter, Jersey, Newquay and Southampton have Flybe making up a larger proportion at of their operations. Without the Flybe operations they with almost certainty would not be able to cope employing so many staff, forcing many members of staff to be laid off. As an additional effect these airports connectivity would be wrecked, making them much more minor, forcing members of their local communities to drive to alternative larger airports, which would disconveience these passengers greatly. 

New airlines being established

With the collapse of Flybe there would be many routes that could still sustain services that would now not be served. Whilst some of these routes would be picked up by other carriers, I believe that some new carriers would be set up to pick up the slack. The areas that these carriers I believe would be most likely to be set up would be from Jersey and also in the South West of England. This is due to both these areas having quite a strong reliability on Flybe's operations as well as being relatively isolated from the main population centers of the country. Setting up a new airline would also probably not be that difficult due to the flooding of new aircraft onto the market. With Flybe being the largest operator of the Dash8-Q400 in the world, these aircraft would become quite cheap to purchase, in addition to the fact that there would be many flight crew avaliable trained on these aircraft now unemployed, setting up a new airline would not be overly expensive. 

Expansion of Existing Airlines

With the collapse of Flybe other carriers would try and fill the gap left. I feel that Stobart Air would be the most aggresive of these, as I would imagine that they would partner with Virgin Atlantic to feed their flights in a similar way to what they are currently trying to do with their offer to take over Flybe. However this would probably happen at a slower rate, with Stobart Air having to set up their own ticketing systems and also expand their own fleet and establish their own brand. Another airline that I could imagine expanding is Loganair, who I feel could try and cement their position as Scotland's best reigonal carrier, and make this a market that would be very difficult for any other airline to enter into. 

Check back here next week as tomorrow I am flying to Berlin. Check my twitter for updates from this trip. I will publish some content from that trip on this blog, however at this point I am undecided as to what that might be.