Flybe to end all domestic flights from Gatwick by March 2014 after selling its 25 slot pairs to easyJet
Flybe is to stop all of its Gatwick flights after agreeing to sell all its 25 pairs of slots to EasyJet for £20 million, as it needs the money. That only leaves Flybe with a few London slots, at Luton. Flybe will leave Gatwick the end of March 2014. That means the end of its flights from Gatwick to Belfast City, Guernsey, Inverness, the Isle of Man, Jersey, Newcastle and Newquay. EasyJet is under no obligation to replace domestic flights, and will just use the slots for the most profitable holiday routes. There are concerns in Inverness about losing their Gatwick link. Flybe launched an expensive complaint to the CAA in 2010, complaining about the level of its charges. However the CAA ruled in September that Gatwick was within its rights to raise its landing fees for smaller aircraft, as it prefers to use slots for larger planes carrying more passengers. Flybe has been hit because on domestic flights, APD of £13 is charged on both legs of a journey. Flybe’s Chairman, Jim French said that even if Gatwick did not want its passengers, other airports would, and Flybe would work to ensure that the “UK’s regional passengers don’t get left in the cold.”
Flybe to axe all domestic flights from Gatwick
Flybe is to axe all of its Gatwick flights, having sold its arrival and departure slots at the London airport to easyJet for £20 million.
It announced to the London Stock Exchange this morning that it will pull out of the airport, from where it has operated for 22 years, at the end of March 2014.
It will mean the loss of flights from the London airport to Belfast City, Guernsey, Inverness, the Isle of Man, Jersey, Newcastle and Newquay.
EasyJet said it would use the 25 pairs of slots it has acquired to launch new routes from Gatwick and to add additional flights on its most popular existing routes. Further details will be announced at the end of this year.
Flybe blamed its decision to pull out of Gatwick on the airport’s pricing regime, which, it said, had led to a 102% rise over the past five years. It said Air Passenger Duty was also a factor.
The airline launched an expensive complaint to the Civil Aviation Authority in 2010, claiming that Gatwick was acting in an anti-competitive and discriminatory manner, but the CAA ruled in September that Gatwick was within its rights to raise its landing fees for smaller aircraft.
Flybe said that decision led to today’s “regrettable” announcement.
It said it will continue to operate all its seven domestic routes to Gatwick until March 29 next year.
Funds generated from the sale of the slots will be re-invested in its remaining 159 routes.
Flybe’s chairman and chief executive Jim French said: “No business can swallow such a massive increase in such a short period of time and it is with real regret and some anger that we have made this decision.
“Flybe fully appreciates the implications this will have, not only on individual passengers but also on the wider regional economies that have come to rely on the convenient lifeline connections we provide to Gatwick.
“However, we have to accept the ugly reality that Gatwick simply doesn’t want smaller, regional aircraft at their airport and, with the absence of a regional aviation strategy and the government’s penalistic and ludicrous policy of charging Air Passenger Duty (APD) on both legs of a domestic flight, I’m afraid it’s inevitable that high frequency services from the UK’s regions will ultimately be squeezed out of Gatwick, as they have been from Heathrow.”
He said Flybe will work with other UK airports to develop its regional services.
“Until March 29th 2014, however, it remains business as usual and I can reassure all our customers that until then Flybe will continue to offer affordable, reliable and above average punctuality on our seven London Gatwick routes with no changes to pricing, frequency or timings,” he said.
“The connectivity we provide for our seven million passengers through major international airports like Manchester, Birmingham, Glasgow, Edinburgh, Southampton, Amsterdam and Paris will mean that hundreds of international connections will also still be available.
“Gatwick airport may not want those connecting passengers, but others do. Flybe will work with our airports across the nation to ensure the UK’s regional passengers don’t get left in the cold.”
Flybe also announced to the Stock Exchange today that it has made “significant positive progress” in its plan to return it UK-based scheduled airline to profitability.
It said it has surpassed its target savings of £25 million, with £30 million of annual cost savings delivered for year 2013/14 onwards, and the deal agreeing in principle with its pilots for a 5% reduction in salary in return for extra time off.
The sale of its Gatwick slots to easyJet is subjet to the approval of Flybe’s shareholders.
23 May 2013 (BBC)
Concerns over Flybe’s Gatwick slots sell-off to Easyjet
Business leaders and politicians have raised concerns over the future of Inverness’s links with London Gatwick.
A three-times-a-day service operated by Flybe is in doubt following the airline’s decision to sell all of its take-off and landing slots at Gatwick.
Easyjet, which also operates a Gatwick-Inverness service, is set to take over the slots next March in a £20m deal.
There are worries that the frequency and timings of the Inverness connections will be affected.
Transport Minister Keith Brown said he had been in contact with Easyjet.
He said: “The prospect of cuts to Inverness Gatwick services is deeply worrying and I have requested an urgent meeting with Easyjet, with a view to ensuring capacity on this service is maintained.
“While I welcome the confirmation that the current level of service will continue until March 2014, it is essential for the economic development of the Highlands region that the service is maintained beyond summer 2014.
“I have already had discussions with Easyjet this morning and will be keeping in regular touch to press the case.”
The Inverness and Scottish chambers of commerce, the Scottish Council for Development and Industry, Highland Council and politicians are among those raising concerns.
The sale is part of a cost-cutting programme for the airline. About 600 workers have been made redundant and pilots have agreed a 5% pay cut.
Flybe serves a number of destinations directly from its Gatwick hub, including Belfast, the Isle of Man, Guernsey, Jersey, Newcastle and Inverness.
The airline said the deal was subject to shareholders’ approval and that it would continue to operate all the slots until March 2014.
Stewart Nicol, of Inverness Chamber of Commerce, said the availability of connections at the moment meant Highland firms could do a day’s business in London.
Drew Hendry, leader of Highland Council, said he hoped Easyjet would recognise the importance of the Flybe service to the region’s economy.
Fraser Grieve, the Highlands and Islands manager for the Scottish Council for Development and Industry (SCDI), expressed concern about the deal and called for urgent steps to safeguard the flights.
He said: “Flybe’s decision highlights the vulnerability that regional routes into London face as a result of a lack of capacity at Heathrow and Gatwick Airports and the financial value of these slots.
“The air connections to and from Inverness are vital economic links and the move to Easyjet will likely result in both a loss of service and a lack of competition on the route.”
He added: “The UK’s leading international gateways must be able to accommodate the economic needs of the whole of the UK.
“Oil and gas services and food and drink in the north are two of the UK’s leading exports and they must be able to reach overseas markets. Tourists and investors must also be able to get to the north of Scotland.”
SNP MSPs have accused Lib Dem MP Danny Alexander of “hypocrisy” in a political row over the future of Gatwick-Inverness links.
Mr Alexander, who is MP for Inverness, Nairn, Badenoch and Strathspey and chief secretary to the Treasury, said “astronomical increases” in landing charges at Gatwick had hit Flybe hard.
Mr Alexander said: “Last year’s Civil Aviation Authority investigation changed nothing, but we need to press Gatwick to think again in the light of the damaging economy impact.
“There is clearly an opportunity for Easyjet to strengthen its Inverness to Gatwick services, but keeping early morning and late evening services will be critical for business, as will the ability easily to connect onto international flights.”
He added: “I welcome Easyjet’s positive commitment to building on its Inverness connections, as well Flybe’s commitment to maintaining its other services.”
However, the SNP said the cost of the UK government-levied Air Passenger Duty (APD) was to blame and had hampered Flybe’s ability to make its links profitable.
Fergus Ewing, SNP MSP for Inverness and Nairn, said: “The loss of these services would be a hammer blow for the Highlands.
“The Inverness Flybe service is the one used by Danny Alexander to get to Westminster – and now it is being withdrawn, in part because APD is too high.
“That is because of the taxation policies of Danny Alexander’s own government – and he is guilty of the most appalling hypocrisy on this issue.”
Liz Cameron, chief executive of Scottish Chambers of Commerce, said that both Scottish and UK governments had failed to protect the Gatwick-Inverness link.
She said: “Government action is required north and south of the border to help to sustain and grow Scotland’s aviation market.
“Our airports are working tirelessly to serve the needs of Scotland but they are being hamstrung by a lack of support from government.
“Our politicians at Westminster and Holyrood need to recognise the critical role that our air links play in our economy and deliver the right environment and support for both the airports and airlines.”
Easyjet said it was looking into the possibility of maintaining some of Flybe’s Highland links with London.
A spokeswoman said Easyjet was already committed to serving Inverness and carried twice as many passengers as Flybe to London each year.
With a hiatus over Britain’s aviation policy, the future of London’s airport is often seen as an issue for Londoners.
And while it’s a noisy row for those under the flight paths, the economic impact of the bottlenecks in London matters at least as much to those who fly in as those who fly out.
It matters most to those regional airports with passengers dependent on connecting to global flights.
While the competition authorities have stepped in to ensure competition on Heathrow’s links with both Edinburgh and Aberdeen, the break up of BAA’s control of Heathrow, Gatwick and Stansted is leading to less regulation.
Meanwhile, the high cost of landing/takeoff slots drives airlines to seek high returns on their investments, which tend to come from larger aircraft flying longer distances.
That hits connections to the rest of Britain. And while rail services into London have improved for much of England, travellers from Scotland still need to be able to connect by air.
At least as important, Scottish tourism – which is a big employer, particularly in the Highlands – needs competitive and well-timed air links through Heathrow and Gatwick, without which many inbound travellers may not be bothered heading north.
It’s an even bigger problem for Newquay in Cornwall, with slow train links and no other airline currently providing a service into Gatwick.
Flybe in talks to sell its 25 Gatwick landing slots for up to £20 million
Date added: May 14, 2013
Flybe is in talks about selling its 25 Gatwick landing slots to raise money, as it is expected to announce a large financial loss – about £14 million – for last year. The slots could raise up to £20 million. Easyjet is one of the companies Flybe is believed to be in discussions with to sell to. Flybe was floated on the stock market at the end of 2010. Since then it has faced soaring fuel costs, falling passenger numbers and higher airport duty. It is currently axing about 10% of its 3,000-strong UK workforce to cut costs by at least £35m. It is also reviewing its network of 13 UK bases of Aberdeen, Belfast City, Birmingham, Edinburgh, Exeter, Guernsey, Glasgow, Inverness, Isle of Man, Jersey, Manchester, Newcastle and Southampton. Last week, BALPA confirmed Flybe’s pilots had agreed to a 5% pay cut to avoid compulsory redundancies. If Flybe sells all its Gatwick slots, that only leaves it a few London slots, at Luton.