Monarch Aircraft Engineering Limited (MAEL) has terminated its contract to maintain Flybe aircraft after concerns about the airlines ability to pay.
Flybe, which recently put itself up for sale, is reportedly short of available cashflow following a downturn in profits and sources close to situation said that MAEL had asked for invoices to be paid early.
Following that MAEL decided to suspend work for the airline effectively terminating the contract, something which the airline says was done “without due consideration of our business, customers and operations, and with no legal justification”.
MAEL splintered off as separate company from Monarch Group when the airline collapsed in 2017 and has run a successful operation since maintaining aircraft for third party airlines.
Speaking about the contract a spokesperson for Monarch Aircraft Engineering Limited said: “Due to circumstances we cannot disclose, we decided to suspend repair and maintenance operations for Flybe on Friday 23 November.”.
Cashflow is one of the biggest fears for Flybe at the moment with potentially more suppliers withholding services and payment providers requiring a bigger cash deposit which could leave the airline unable to meet obligations.
Flybe is understood to be in talks with several groups with a view to a takeover bid including Virgin Atlantic and International Airlines Group (IAG).