ALEX BRUMMER: After FlyBMI collapse, why airline over-supply has plunged budget carriers including Norwegian, Whizz Air and Ryanair into the red
Budget British airline Flybmi collapsed on Sunday leaving thousands of passengers stranded
Uncertainty over Brexit negotiations undoubtedly played a part in the decision by the owners of Flybmi to call in the administrators over the weekend.
Passengers are increasingly nervous about booking with lesser known carriers in the run-up to March 29, despite the EU’s agreement that British-based and British-owned airlines will be able to fly to and from the Continent and overfly Europe for at least nine months after the UK leaves.
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The East Midlands-based airline had 376 staff and operated 17 planes that flew to 25 cities
The rise of a new generation of discount carriers, challenging the dominance of established no-frills players such as EasyJet and Ryanair, means that there is huge overcapacity in the industry.
In essence, the numbers of seats outstrips the volume of travellers. This has meant a bonanza for consumers who are able to travel to Europe, and more recently cross the Atlantic, at super low prices.
But it has been destructive for the discount carriers.
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People were left in the lurch at airports across the country due to Flybmi’s sudden collapse
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Alex Brummer believes a new generation of discount carriers has led to an oversupply of flights
Transatlantic carrier Norwegian has, after initial success and growth, plunged into losses and is desperately looking for an injection of cash. Hungarian-owned Wizz Air has plunged into losses. Even Ryanair, Europe’s most profitable airline, owned up to losses in the last quarter.
Meanwhile, tour operator Thomas Cook has put its profitable airline up for sale as part of a drive to raise new funds, while Monarch went bust last year.
