Flybe is saved: Government strikes deal with airline’s shareholders to keep it afloat
Flybe shareholders have struck a deal with the government to keep the regional airline operating.
Business minister Andrea Leadsom today said she was ‘delighted’ to have reached an agreement as the airline teetered on the brink of collapse with bosses pleading with the government to defer its multi-million-pound air passenger duty bill.
The deal means Flybe has avoided being the second UK airline to fail in four months, after Thomas Cook went bust in September.
Ms Leadsom said: ‘Delighted that we have reached agreement with Flybe’s shareholders to keep the company operating, ensuring that U.K. regions remain connected.
Flybe shareholders have struck a deal with the British government to keep the regional airline operating, business minister Andrea Leadsom said on Tuesday
‘This will be welcome news for Flybe’s staff, customers and creditors and we will continue the hard work to ensure a sustainable future.’
Chancellor Sajid Javid had held talks with the business and transport secretaries to discuss if the loss-making regional carrier can defer paying this year’s estimated air passenger duty (APD) bill of £106 million for three years or whether the tax should be cut for all domestic flights, according to multiple reports.
It comes after Boris Johnson said ministers would not ‘step in and save’ Flybe amid claims air passenger duty could be cut
Airlines claim APD restricts connectivity and passenger growth.
Passengers on domestic flights pay £26 in APD for a return trip, with higher rates for longer flights and premium cabins.
The tax is expected to be worth £3.7 billion to the Treasury in 2019/20.
Transport Secretary Grant Shapps also welcomed today’s agreement.
He said: ‘Delighted we’ve been able to work closely with Flybe to ensure Europe’s largest regional airline is able to continue connecting communities across Britain. @transportgovuk will undertake an urgent review into how we can level up the country by strengthening regional connectivity.’
Boris Johnson had said ministers would not ‘step in and save’ Flybe amid claims air passenger duty could be cut on all domestic flights in Britain – saving travellers £13 a trip.
Flybe has long claimed that APD is unfair by disproportionately affecting domestic customers who must pay it every time they take off from a UK airport.