Over the past decade, the airline industry has taken a battering — from recession, oil crises, deregulation, terrorist attacks, strike action, the Sars outbreak and even a volcanic eruption.
Many British airlines did not survive and others merged with or were acquired by others. The number of commercial airlines registered in the UK fell from 56 in 1973 to 33 in 2011. Indeed, such was the state of the industry in Britain that Philip Hammond, the transport secretary in 2010, predicted that domestic flying in the UK would become “a thing of the past”, with flights replaced by fast trains.
Yet Flybe is still in the air. It was unlucky that in its first year as a publicly traded company it had to contend with sustained high fuel prices alongside falling consumer spending. Other short-haul carriers, such as easyJet and Ryanair, were able to retreat to so-called thick routes, such as Gatwick to Barcelona, where there are large numbers of passengers to help to sustain revenues — but it couldn’t. Flybe’s business model focuses on routes such as Birmingham to Belfast, and so it swims in smaller ponds and is vulnerable to economic drought.
But the fact is there is nothing wrong with its business model. Flybe provides a much-needed service �� social and business — to many of Britain’s smaller cities — and with rivals now out of the way it has that niche market all to itself.