2020: UK government and shareholders save FlyBe from collaps

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https://www.ch-aviation.com/portal/news ... save-flybe
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https://www.bbc.com/news/business-51100029

Flybe: UK government considers new funding for airline

The government is considering measures including short-term funding to save Flybe from collapse.

This is in addition to a potential cut in air passenger duty (APD) on domestic flights to help Flybe,
which operates more than half of UK internal flights outside London.


Prime Minister Boris Johnson told the BBC there was "no doubt" about the importance of the airline.

The prime minister told the BBC
that it was "not for government" to step in and save companies that run into trouble.

But he added: "We see the importance of Flybe in delivering connectivity across the whole of the United Kingdom."


The airline carries about eight million passengers a year from airports
including Birmingham, Manchester, Southampton, Belfast City, Cardiff and Aberdeen,
to the UK and Europe.

Tim Jeans, chairman of Cornwall Airport,
said Flybe was "very important not just to our airport but to regions,
to nations and to island communities across the UK".

"They provide lifeline services to destinations across the rest of the UK
that simply are not replicated by either other airlines or convenient and affordable train services."

What is the government considering?

The UK government is considering a range of measures to help the Exeter-based company.

These include providing short-term funding to Flybe,
using government money that is available to companies for investment purposes
and which does not breach EU rules on state aid.

It is understood that Flybe's owners would also be required
to invest tens of millions of pounds into the company as part of any deal.

A cut to air passenger duty (APD) on domestic routes is also being considered.

This is expected to be applied industry-wide
and to be announced at the Budget in March.

The change would allow Flybe to defer its tax bill, design a rescue plan, and secure more than 2,000 jobs.

Improving connectivity outside of London was a key Conservative manifesto pledge
and at least one of Flybe's routes, between Newquay and London,
is subsidised by the government.

Sky News reported that the possible deal over air passenger duty
could see Flybe defer a payment of more than £100m for three years.

It's also thought any turnaround plan would be financed
by a consortium led by Sir Richard Branson's Virgin Atlantic,
which rescued the airline a year ago.

Virgin Atlantic, Southend Airport-owner Stobart Group and hedge fund Cyrus Capital Partners paid £2.8m for the airline
and agreed to invest £100m in the loss-making business.

Flybe has refused to comment on talks over a rescue.

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https://www.bbc.com/news/business-51113895

Flybe: Government strikes a deal to rescue troubled airline

30 minutes ago

The government has agreed a rescue plan for troubled regional airline Flybe.

Ministers agreed to work with Flybe to figure out a repayment plan
for a significant tax debt that is thought to top £100m.

Meanwhile, the firm's owners have agreed to pump more money into the loss-making airline.

Business Secretary Andrea Leadsom said the deal would keep the company operating.

That will be a relief to many of the eight million passengers who fly with the airline each year.


Flybe services dozens of UK domestic routes that are not flown by other airlines,
making it the largest carrier to fly out of some regional airports like Newquay.

"Flybe plays a critical and unique role in the UK aviation system,
supporting the development of the regions,
providing essential connectivity to businesses and stimulating the growth in trade,"
the boss of the Airport Operators Association, Karen Dee,
said in a statement welcoming the rescue deal.

As part of the agreement, Flybe's shareholders, which include Virgin Atlantic and Stobart Group,
have agreed to put more money into the business.

The government has promised to review the £26 air passenger duty that is levied on domestic UK return fights,
which has added to the airline's losses.

'Very encouraged'

"Delighted that we have reached agreement with Flybe's shareholders to keep the company operating,
ensuring that UK regions remain connected," Ms Leadsom tweeted.

"This will be welcome news for Flybe's staff, customers and creditors
and we will continue the hard work to ensure a sustainable future."

Lucien Farrell, the chairman of Connect Airways - which owns Flybe - said the group had agreed
to "keep Flybe flying with additional funding alongside government initiatives".

"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," he said.

Urgent review

Transport Secretary Grant Shapps said the government
had worked closely with Flybe to ensure its planes were able to continue flying.

He said the Department for Transport would conduct an urgent review
that will seek to assess how it can improve regional connectivity
and ensure airports continue to function across the country.


The British Airline Pilots Association, a union, welcomed the news.

"This is good news for 2,400 Flybe staff whose jobs are secured
and regional communities who would have lost their air connectivity without Flybe,"
general secretary, Brian Strutton said in a statement.

Flybe, which flies to 170 different destinations,
has been struggling under the weight of an estimated £106m bill for air passenger duty
as well as a slowdown in demand that has hurt the airline's finances.

The carrier's boss, Mark Anderson, said:
"This is a positive outcome for the UK
and will allow us to focus on delivering for our customers and planning for the future.

"Flybe is made up of an incredible team of people,
serving millions of loyal customers who rely on the vital regional connectivity that we provide."

https://www.bbc.com/news/business-51113895