Business Failure | Low Capacity Utilisation Brings Down Flybe - Again

Bad news for airline employees, airport staff and customers who rely on Flybe's network of flights across the UK and Europe. Flybe has ceased trading - again.

Lots of coverage in the news today, including here on BBC Business, about the collapse of FlyBe.

This quote from a regular customer hints at the underlying reason why FlyBe ran out of cash and could not sustain its loss-making operations. Low capacity utilisation.

"Every time I've flown, I've always thought: 'How are they making a profit?' because the planes have never been more than 50% full."

Low capacity utilisation is a killer for airlines. Most of the costs of operating an airline are fixed, making it vital that those planes are as full as possible to maximise the contribution per flight.

Flybe's huge fixed costs would have included those typical for a short-haul, regional airline, such as:

• Aircraft leases or purchases: Flybe operated smaller aircraft which can be expensive to lease or purchase.
• Maintenance and overhaul costs, costly due to the need for regular inspections and repairs.
• Airport fees and charges, including landing fees, ground handling fees, and parking fees.
• Crew costs, including pilots and cabin crew, which can be a significant cost.

Flybe has failed before. Flybe was put into administration in March 2020 as it struggled financially due to a combination of factors, including the impact of the COVID-19 pandemic on travel demand and increased competition from other airlines.