Row over state aid as Flybe seeks £100m loan from Government

FLYBE has requested a £100m loan from the Government in the latest twist in its bid for survival.

The appeal, first reported by the Financial Times, comes amid a war of words between Flybe, the Government and rival airlines over the extent of government support afforded to the perennially loss-making airline.

Boss Mark Anderson has hit out at suggestions of a Flybe “bailout”. He says any loan from the state would be on commercial terms.

Separately, Sajid Javid, the Chancellor, dismissed complaints from rival airline bosses that Flybe received state aid from the taxman as part of its government-backed rescue deal in the UK.

In a letter to Ryanair’s chief executive Michael O’leary, Mr Javid said an agreement between Flybe and the taxman to defer air passenger duty (APD) was a “standard ‘Time to Pay’ arrangement … because of their short-term difficulties”, Sky News reported.

Mr O’leary had called for Flybe’s “APD holiday” to be extended to its rivals such as Ryanair, British Airways and Virgin.

Responding to him, the Chancellor said: “Time to Pay arrangements are open to all businesses, and more than 700,000 such arrangements were in place with business and individuals last year. These arrangements seek to support viable businesses with genuine short-term difficulties and ensure that taxes owed are paid in full.”

The escalation came as Poland’s LOT saw off rival bidders to snap up Thomas Cook’s former German carrier Condor, creating an aviation firm that will carry about 20 million passengers per year.

The deal comes after Condor was handed a €380m (£320m) loan from the German government to keep it airborne after the collapse of Thomas Cook. Current bosses will stay on at Condor, which competes with Lufthansa and Tui. The deal is expected to be completed by April after approval from competition regulators.

Condor had also attracted interest from private equity groups Greybull and Apollo. Greybull previously owned Monarch Airlines in the UK, which collapsed in 2017. It also bought British Steel in 2016 for just £1, but led the company into insolvency in May of last year.

Thomas Cook collapsed in September after 178 years of trading when the state refused to bail it out, stranding 150,000 holidaymakers.

The Government declined to comment.