Flybmi, Honda, Barclays, Sainsbury’s Asda merger: your commercial news round-up
updated on 21 February 2019
It’s been another week of political upheaval with several MPs from the Labour and Conservative parties breaking away to form the new Independent Group. With just over a month until B-Day – the day Britain officially leaves the EU – and with nobody really sure what will happen afterwards, the business world is already facing the repercussions. More on that, and other issues, below:
- Regional airline Flybmi this week went into administration, stranding thousands of passengers and causing Loganair to step in and secure three of its key air routes from Aberdeen. The East Midlands-based airline employs 376 staff and operates 17 planes flying to 25 European cities. A spokesperson for the firm blamed the problems on recent spikes in fuel and carbon costs, as well as uncertainty created by the Brexit process. Experts have predicted that Flybmi won’t be the last airline to fail.
- Japanese carmaker Honda announced that it will be closing its Swindon factory from 2021, putting up to 7,500 jobs at risk. The company insisted that Brexit was not a factor, but MPs and industry commentators have questioned the claim and seen the decision as another blow to the British car industry, and to the future of business in the UK after Brexit.
- Barclays has set aside £150 million to cover the impact of “anticipated economic uncertainty in the UK”, the bank announced this week as it reported a slight fall in its annual profits. The disclosure adds weight to the warnings of the economic fall-out of a no-deal Brexit, with the Royal Bank of Scotland last year taking a £100 million provision for uncertainty after Brexit.
- The Competitions and Markets Authority (CMA) has cast doubt on Sainsbury’s plan to buy rival supermarket Asda. The competition watchdog said that customers could see higher prices and less choice if both grocers combined, and it threatened to block the deal. Sainsbury’s shares plummeted 15% after the news, with chief executive Mike Coupe calling the CMA’s analysis “fundamentally flawed”.
- A report published today by a committee of MPs has warned of the decline of the British high street, claiming that city centres will become “ghost towns” as consumers’ shopping habits change. The committee suggests that the government considers taxing online sales, deliveries or packing, and cutting property taxes for retailers in order to boost the high street economy.
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