British airline Flybmi went bust on Saturday (16 February), cancelling all flights with immediate effect. The regional carrier cited Brexit uncertainty as one of the reasons for entering administration, as well as increased fuel costs.
A spokesperson for British Midland Regional Ltd said the company had taken the decision due to increased fuel and carbon costs and to uncertainty arising from Britain’s plans to leave the European Union on 29 March.
British airlines will not participate fully in the EU’s flagship Emissions Trading Scheme after Brexit, which means that the carbon price (currently trading just above €20 per tonne) is a major financial concern for carriers.
BMI, based in the English East Midlands, operates 17 planes flying to 25 European cities. It employs 376 people in the UK, Germany, Sweden and Belgium.
“We sincerely regret that this course of action has become the only option open to us, but the challenges, particularly those created by Brexit, have proven to be insurmountable,” the company said.
Spikes in fuel and carbon costs had undermined efforts to move the airline into profit.
It added: “Current trading and future prospects have also been seriously affected by the uncertainty created by the Brexit process, which has led to our inability to secure valuable flying contracts in Europe and lack of confidence around bmi’s ability to continue flying between destinations in Europe.”
The airline, which said it carried 522,000 passengers on 29,000 flights in 2018, including to destinations like Brussels, Hamburg and Milan, advised customers with bookings to contact their bank or payment card issuer to obtain refunds.
Airlines could continue to be hard hit by the UK’s departure, especially those that are not under EU-ownership. The European Commission reiterated at the beginning of February that carriers have been warned about the pending problem.
According to EU’s rules, airlines should have at least of 51% of EU-based ownership in order to maintain their operating licences. Companies like Iberia and Vueling will not fulfil that criteria if the UK leaves the bloc without a deal in March.