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Aviation: flybmi - another Brexit casualty?

United Kingdom based flybmi called in the receivers on Saturday and cancelled all of its flights with immediate effect. Its fleet comprised 17 Embraer 135 and 145 regional jets, and it employed 376 staff based in the UK, Germany, Sweden and Belgium. The firm operated regional flights across the UK and into Europe. It also conducted contract flying on behalf of major carriers such as Lufthansa, and was active in the sports charter market.

The closure of flybmi (British Midland Regional) brings to a close a legacy of 81 years flying which started as Air Schools in Derby during 1938. The fledgling business grew and became Derby Airways in 1955 and British Midland Airways a decade later.

Some flybmi services were flown for major airlines including Lufthansa. (Kiefer)

The airline developed a reputation as "the friendly independent" and eventually muscled its way into London Heathrow as a competitor to British Airways. The branding changed again to bmi British Midland in 2001, while its subsidiary British Midland Commuter (formerly Business Air) that operated Saab turboprops became bmi Regional. When bmi was acquired by British Airways, Regional was subject to a management buy-out and subsequently became part of Airline Investment Limited which also controls Loganair.

A spokesman for flybmi said that 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. 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... 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."

Its the B-word again

flybmi was quick to blame Brexit (the UK's departure from the European Union) for some of its woes. It is undoubtedly part of the truth. The proportion of the firm's business came from contract flying in Europe, on routes that did not touch the UK. Come March 29 this year, there is a significant risk that these operations will no longer be permitted as legislation [as it stands] will prohibit airlines based in the United Kingdom from operating services that do not have one end or the other in the UK. Major airlines have mitigated the risk by setting up Europe-based subsidiaries - an effective move for easyJet which could afford to split its resources and 160 aircraft to the Austrian register, but much more challenging and restrictive for a firm like flybmi with only 17 aircraft and 376 staff.

flybmi lost a lucrative contract with Brussels Airlines last year and there were concerns over some of the routes it operated for Lufthansa in the post-Brexit environment. The uncertainty over the future regulations is extremely likely to have reduced the chances of the airline being offered new or extended flying contracts in Europe - why would any business sign up with flybmi when its activities could have been halted at the end of March?