Flybe latest: Boris Johnson says government is working 'very hard' to save airline

Stephanie Cockroft14 January 2020

The Government is "working very hard to do what we can" to save airline Flybe, Boris Johnson has said.

But the Prime Minister warned there are "limits" to what a government is allowed to do to help individual companies.

Chancellor Sajid Javid will hold 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.

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.

If Flybe collapses, it would be the second UK airline to fail in four months, after Thomas Cook went bust in Septembe r.

Asked if he intends to save Flybe, Mr Johnson told the BBC: "It's not for Government to step in and save companies that simply run into trouble.

"But be in no doubt that we see the importance of Flybe in delivering connectivity across the whole United Kingdom.

"It's very important, for instance, where I was yesterday in Northern Ireland, and we're working very hard.

"I can't go into commercially confidential discussions.

"We're working very hard to do what we can, but obviously people will understand that there are limits, commercially, to what a government can do to rescue any particular firm.

"But what we will do is ensure that we have the regional connectivity that this country needs."

Shadow chancellor John McDonnell claimed "bailing out a company through a tax cut across the industry is not the way forward".

He went on: "Working with the company and unions, the Government should look at targeted assistance to support routes judged on economic, environmental and social grounds."

Sajid Javid will hold talks with the business and transport secretaries to discuss whether the airline can defer paying air passenger duty
REUTERS

Greenpeace UK policy director Dr Doug Parr said the policy was "poorly thought out".

“The Government cannot claim to be a global leader on tackling the climate emergency one day, then making the most carbon-intensive kind of travel cheaper the next," he said.

“Cutting the cost of domestic flights while allowing train fares to rise is the exact opposite of what we need if we’re to cut climate-wrecking emissions from transport.

“The aviation sector has got away for years with increasing its carbon footprint. The last thing we need is another incentive for them to pollute more.”

Friends of the Earth campaigner Jenny Bates added: “It would be completely unacceptable and even reckless if the Government cut air passenger duty on domestic flights.

“These short UK trips are exactly the ones we need to avoid in the drive to cut aviation climate emissions to help prevent climate breakdown.

“Instead, the Government could invest more in our rail system and make such trips more affordable.”

Flybe was bought by a consortium consisting of Virgin Atlantic, Stobart Group and Cyrus Capital in February 2019 following poor financial results.

The consortium, known as Connect Airways, paid just £2.2 million for Flybe's assets but pledged to inject cash into the airline to turn it around.

The holding of rescue talks with the Government over the weekend indicates the financing requirements have become greater than expected.

The airline is Europe's largest regional carrier, flying around nine million passengers a year to 170 destinations across the continent.

It has a major presence at UK airports such as Aberdeen, Belfast City, Manchester and Southampton.

The airline began as Jersey European Airways in 1979, operating regional flights from Jersey. Its route network grew and it was rebranded British European in 2000, before becoming Flybe in 2002.

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