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Does FlyBe have a future as a viable business?

Graham Watson

18th January 2020

Just a really interesting article - full of applied microeconomics- which considers whether Flybe is a viable business or is swimming against the tide?

Annual operating profit/loss of Flybe group plc from 2009 to 2018

The article considers whether Flybe's business model is appropriate or not - noting that it is neither a low-cost carrier nor a flagship carrier, as well as the fact that it is liable for Air Passenger Duty (APD) for every single flight.

Thus, if you think about it there are lots of things to be discussed - fixed and variable costs, economies of scale and the different objectives of a firm. You might also consider different equilibrium positions - perhaps Flybe is more of a loss-minimiser than a profit-maximiser?

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to Tutor2U, reads voraciously and is interested in all aspects of Teaching and Learning.

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