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Nottingham Post
Nottingham Post
Business
Matthew Bunn

Airline FlyBMI owed more than £36m when it filed for administration, says official report

Collapsed airline FlyBMI owed more than £36 million to creditors when it filed for administration in February, an official report shows.

The company, which was based at Castle Donington, pointed the finger at rising fuel and carbon costs and uncertainty around Brexit as it suspended all operations to its 25 European destinations.

Now, a report from administrators BDO LLP shows £17.2 million is owed to trade creditors, including East Midlands Airport, Heathrow and Rolls-Royce, which is claiming £2.25 million for a contract.

In total, the report estimates unsecured claims of £36.9 million, with the firm's employee payroll adding up to £4.1 million and £3.8 million for passenger claims.

When the company, British Midland Regional Limited, announced its decision on February 16 this year, a spokesman said: "The airline has faced several difficulties, including recent spikes in fuel and carbon costs, the latter arising from the EU's recent decision to exclude UK airlines from full participation in the Emissions Trading Scheme.

"These issues have undermined efforts to move the airline into profit.

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"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 company, which had more than 300 employees, was founded in May 1987 and operated from its head office in Castle Donington. At the time it went into administration, it operated 17 regional jet aircraft on routes - including from East Midlands Airport - to 25 European cities.

It was owned by Airline Investments, also the holding company for airline Loganair, which has reported an unaudited £6.85 million pre-tax loss for FlyBMI for the year ended 31 March, 2018.

The company's business review for the airline stated it had been unsuccessful in a number of ventures including point to point schedule flying on business and corporate customer routes and third party contract flying.

The review added: "The business incurred heavy losses during the year."

Loganair, a Scottish regional airline, has stepped in to take on some of FlyBMI's routes and announced two new routes this week to Brussels and Inverness from East Midlands Airport.

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