Is Flybe just the first?

THOUSANDS of passengers stranded, 2,400 workers unemployed and the biggest provider of flights between the regions of Britain driven out of business.

This is the fallout from the collapse of Flybe – the first corporate victim of coronavirus. Yes, it was a weak company and had almost folded before. But plummeting passenger numbers caused by coronavirus fears certainly pushed it over the edge.

And it probably won’t be the last. Flybe could yet prove to be the canary in the mine. The travel industry is especially vulnerable. But any firms relying on cash flow, especially if they have debts to service, could soon succumb. So the Government and banks must be ready to ensure that business is supported in these fraught times, through tax breaks and credit extensions.

The demise of Flybe has dire implications for many parts of the country, particularly those which are difficult or expensive to reach by rail or road.

Boris Johnson has pledged to ‘level up’ the regions. Improving transport links is central to that strategy. So how can he persuade other airlines to take up these routes, so vital to local economies?

One possibility is to cut air passenger duty on internal flights, making domestic journeys more viable. Another is direct subsidy, perhaps under the existing public service obligation scheme.

Both have their difficulties. Cutting passenger duty would inflame the green lobby, while direct subsidy would be anathema to free-market Tories.

But if Boris is to keep his promise to boost Britain’s ‘left-behind’ towns, doing nothing is not an option.