Ministers have agreed to defer troubled Flybe’s air passenger duty bill until the summer with shareholders also chipping in an extra £20m. Tony McDonough reports
Flybe’s routes from Liverpool to the Isle of Man and Guernsey will stay in the air for now after the troubled regional airline secured a rescue deal from the Government.
It is believed the Government has agreed to defer the carrier’s £106m air passenger duty bill until the summer. It is also understood shareholders of the company have promised extra investment of £20m.
It was reported at the weekend that Flybe, which flies to 170 destinations, was on the brink of collapse and was in last-ditch talks with ministers in an effort to rescue the jobs of its 2,400 employees and a further 1,400 in the supply chain.
Flybe serves 25 UK airports and accounts for more than half of domestic flights outside London. Airports heavily dependent on its routes include Anglesey, Southampton, Belfast City, Exeter and Newquay. It also has a major presence at Jersey, Cardiff, Guernsey and the Isle of Man.
Lucien Farrell, the chairman of Connect Airways – which owns Flybe – said the group had agreed to “keep Flybe flying with additional funding”. He added: “We are very encouraged with recent developments, especially the Government’s recognition of the importance of Flybe to communities and businesses across the UK and the desire to strengthen regional connectivity.”
Speaking on BBC Radio 5 Live on Wednesday morning, health secretary Matt Hancock said that connectivity around the country is incredibly important”. However, the news did not go down well with environmentalists. Green MP Caroline Lucas, Tweeted: “Domestic flights need to be reduced, not made cheaper.”
The deal was also criticised by Willie Walsh, chief executive of IAG, the owner of British Airways, who called it a “blatant misuse” of public funds”. He added: “Prior to the acquisition of Flybe by the consortium which includes Virgin/Delta, Flybe argued for taxpayers to fund its operations by subsidising regional routes.
“Virgin/Delta now want the taxpayer to pick up the tab for their mismanagement of the airline. Flybe’s precarious situation makes a mockery of the promises the airline, its shareholders and Heathrow have made about the expansion of regional flights if a third runway is built.”