Ministers have agreed a rescue deal with Flybe that will allow the ailing regional airline to keep operating.
Business secretary Andrea Leadsom said she was “delighted” with the agreement, which came after rescue talks over the weekend.
It is thought the government has agreed a deal on the airline’s air passenger duty (APD) bill, but the details are not yet clear.
She tweeted: “Delighted that we have reached agreement with Flybe’s shareholders to keep the company operating, ensuring that U.K. regions remain connected. This will be welcome news for Flybe’s staff, customers and creditors and we will continue the hard work to ensure a sustainable future.”
Transport secretary Grant Shapps also welcomed the 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.”Delighted that we have reached agreement with Flybe’s shareholders to keep the company operating, ensuring that U.K. regions remain connected. This will be welcome news for Flybe’s staff, customers and creditors and we will continue the hard work to ensure a sustainable future.— Andrea Leadsom MP (@andrealeadsom) January 14, 2020Chancellor 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 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.
The deal means Flybe has avoided being the second
UK airline to fail in four months, after Thomas Cook went bust in September.
This is a breaking news story and will be updated. Follow HuffPost UK on Twitter here, and on Facebook here.Related... Saving Flybe By Cutting Airline Tax Would Be ‘Exact Opposite Of Tackling Climate Change’ Birmingham Airport Evacuated After Suspicious Items Discovered In Checked Luggage Thousands Of Passengers Stuck As Flybe Cancels Flights