Credit card companies held £50m of Flybe cash

Credit card companies were hoarding almost £50m of cash owed to Flybe at the point it collapsed, underlining the financial squeeze placed on the struggling airline by its commercial partners.

Virgin Atlantic informed Flybe's directors on Tuesday evening that"as a result of the adverse impact of COVID-19 coronavirus on its own bookings, it was no longer in a position to provide further funding". In a desperate attempt to save Flybe, it explored a pre-pack administration sale of"part of the airline business of the company to Cyrus [Capital Partners, one of the three Flybe shareholders] or an affiliated entity". However, the length of securing a licence from aviation regulators rendered that option unviable.

Flybe faced a winding-up order from the taxman in January as a result of unpaid passenger duty of £5.8m and an £844,000 customs excise duty penalty.Mr Anderson's statement underlines the parlous state of Flybe's finances long before the advent of COVID-19, with the airline just hours from bankruptcy in mid-January.

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