Flybe rescue deal agreed

A DEAL to prevent the collapse of Flybe, Europe’s biggest regional airline, was thrashed out last night.

Business Secretary Andrea Leadsom said the Government had reached an agreement to keep the troubled firm operating.

Leadsom and Transport Secretary Grant Shapps had reportedly been discussing with Chancellor Sajid Javid options including a three-year deferral of a £106million tax bill.

Flybe’s shareholders have also committed more funding.

Leadsom tweeted: “Delighted that we have reached agreement with Flybe’s shareholders to keep the company operating, ensuring that UK 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.”

Flybe chief 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.” Short-term funding and cutting Air Passenger Duty for all airlines on internal flights were considered, enabling the company to avoid breaching European Union state aid rules while giving it time to put in place a turnaround plan.

But the latter drew criticism from environmental groups.

The Treasury said it would review Air Passenger Duty “to ensure regional connectivity is strengthened while meeting the UK’s climate change commitments to meet net zero by 2050”.

Prime Minister Boris Johnson had said the Government was “working very hard to do what we can” to help the Exeter-based airline, which flies more than eight million passengers a year between 56 airports in Britain and Europe.

A collapse would have made more than 2,000 staff redundant.