flybeThe sudden collapse in March of the airline company FlyBe, announced in the middle of the night with no warning to the more than 2,000 employees, brings to an abrupt end a protracted disintegration that has felt like watching a car crash in slow motion.

Slackening demand resulting from Coronavirus has been no more than a final straw. For a long time the company was visibly in difficulties, bleeding £20m a year in losses.

FlyBe operated nearly two out of five domestic flights in the UK, reaching parts of the country ill-served by other operators, and it was clear that the company’s demise would undermine efforts to improve regional connectivity, to the detriment of the national economy. But rather than itself taking any responsibility for running this vital service, the government sat on its hands, leaving the company’s ‘rescue’ to the gentle mercies of a business consortium (led by Virgin and including Stobart and Cyrus Capital), which proceeded to drive the company further into the ground.

When crisis point was reached in January this year, there was talk of the government loaning the company £100m and deferring payment of £106m worth of Air Passenger Duty (APD), the tax on passenger flights from UK airports. (Needless to say this ‘rescue’ plan was intended to prop up FlyBe rather than bring it into public ownership, the only rational solution.)

But in February the Chancellor, Sajid Javid, who had favoured overhauling APD, fell foul of a palace coup at the court of Tsar Boris, and his replacement Rishi Sunak was against messing with the tax. Soon Whitehall was briefing that the mooted £100m loan was also for the chop, certain criteria not having been met.

Now, after two months of wrangling in secret behind closed doors in government departments and company boardrooms, with FlyBe’s employees kept in the dark about their future, their hopes alternately raised and dashed as rumour succeeded rumour, the news finally broke: the company is officially bankrupt.

The insanity of leaving transport in private ownership has never been more obvious than in the unfolding FlyBe saga. The fact is that reliable, integrated and environmentally responsible air and rail transport is a basic necessity in any modern industrial economy, and if capitalism is incapable of delivering that, it is clearly past its sell-by date and ready to be bundled into the dustbin of history.

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