Britain reaches deal to rescue regional airline Flybe

LONDON (Reuters) – Regional airline Flybe was rescued on Tuesday after the British government promised to review taxation of the industry and shareholders pledged more money to prevent its collapse.

The agreement comes a day after the emergence of reports suggesting it needed to raise new funds to survive through its quieter winter months.

After crunch talks with shareholders, Britain’s finance ministry said that it would review both air passenger duty (APD) and Britain’s regional connectivity as part of the plan.

“I welcome Flybe’s confirmation that they will continue to operate as normal, safeguarding jobs in the UK and ensuring flights continue to serve communities across the whole of the UK,” finance minister Sajid Javid said in a statement.

“The reviews we are announcing today … will ensure that regional connections not only continue but flourish in the years to come.”

Flights operated as normal on Tuesday.

Prime Minister Boris Johnson had said earlier that Flybe was important for Britain’s transport links and that the government would do what it could to help the carrier.

Flybe said it was delighted with how the discussions had gone.

“This is a positive outcome for the UK and will allow us to focus on delivering for our customers and planning for the future,” Chief Executive Mark Anderson said.

Under the agreement, the Flybe shareholders agreed to put in tens of millions of pounds to keep the airline running.

Flybe, which has 68 aircraft and about 2,000 staff, was bought last year by Connect Airways, a consortium created by Virgin Atlantic, Stobart Group (STOB.L) and investment adviser Cyrus Capital.

Lucien Farrell, Chairman of Connect Airways, said that it was “very encouraged” by the government’s planned reviews and desire to strengthen regional connectivity.

“As a result, the shareholder consortium has committed to keep Flybe flying with additional funding alongside government initiatives,” he said in a statement.

Last September travel company Thomas Cook entered liquidation after it failed to agree a rescue plan in last-ditch talks with its lenders and the government.


The aviation industry has long opposed APD, a tax of at least 13 pounds levied on passengers departing from UK airports, which raised about 3.7 billion pounds for the government in 2018/19.

Flybe has said that its business is disproportionately harmed by the tax. The airline says the tax makes its flights more expensive than rail and road alternatives because passengers traveling on return flights within the UK will pay it twice.

Greenpeace and other environmental groups, however, reacted angrily to suggestions that the government could help to encourage flying.

“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,” said Greenpeace chief scientist Doug Parr.

The government said it remains committed to net zero emissions by 2050 as it reviewed the tax ahead of a budget scheduled for March 11.

Rumors about the possible demise of Flybe had heaped pressure on Johnson’s newly elected government. In December, his Conservative party won seats across regions served by Flybe, helped by a promise to improve transport links outside London.

Flybe’s network of routes includes more than half of UK domestic flights outside London. Based in Exeter in the south west of England, it carries eight million passengers a year between 71 airports in the United Kingdom and Europe.

Reporting by Sarah Young and Alistair Smout; Editing by Kate Holton, Mark Potter and David Goodman



Incoming Guatemalan president to keep country’s embassy in Jerusalem

U.S. SEC commissioner backs direct listings to rein in Wall Street fees

Democrats to vote on sending impeachment charges for imminent Trump trial

Global stocks rally, then ease on U.S.-China trade deal; oil gains

El Salvador’s top Anglican bishop urges U.S. to not deport son

Sudanese army takes control of intelligence building in Khartoum – military source

Sudanese government forces retake all intelligence buildings in capital – military source

Former Sudan spy service men clash with government forces in Khartoum

Ex-Nissan boss Ghosn says French envoy told him of inside plot

Mexico’s sale of presidential ‘pride of a nation’ plane fails to take off

Citigroup beats estimates on credit card, trading revenue growth

Schumer says believes majority of U.S. Senate backs Iran war powers resolution

Democrats say measure to rein in Trump on Iran will pass Senate

Trump administration to change economic data release procedures – Bloomberg

One killed in chemical factory explosion in Spain

Some 17 children, six adults being treated after plane dumps fuel on Los Angeles school

Ben & Jerry’s says ‘happy cows’ lawsuit should be sent out to pasture

China to ramp up U.S. car, aircraft, energy purchases in trade deal – source

U.S., China have no agreement for future tariff reductions – Lighthizer, Mnuchin

Syrian state TV says air base in Homs attacked in possible drone strike