Flybe’s links vital

HOW far should the Government go to prop up Flybe, Britain’s largest domestic airline? As an ailing carrier owned by a private consortium, many would say it should stand or fall entirely on its own merits.

Even with a state bail-out, who’s to say it won’t collapse in the near future, leaving the taxpayer with a huge bill and nothing to show for it. In recent times both Monarch and Thomas Cook were allowed to go to the wall after being refused public intervention. Why should Flybe be any different?

But the fact ministers handed the airline a partial lifeline yesterday was a recognition that it is different. Flybe serves many areas of the country which are difficult and expensive to reach by other transport – Wick, Cornwall, Northern Ireland, the Isle of Man among them.

If Boris Johnson is serious about regalvanising Middle Britain, losing Flybe would be a major setback, both psychologically and economically.

So in return for shareholders (including Sir Richard Branson) putting more cash into the airline, the Government has agreed to defer a £106million tax bill and review air passenger duty.

A short-term loan has not been ruled out – though that would be harder to justify.

One option for the review is to cut or abolish the duty on all domestic flights. This would have the virtue of being a tax break, rather than a direct subsidy, and would benefit all internal UK flight operators equally.

There are green arguments against, of course, and there would be a significant cost to the Treasury. But for the wider economy of many ‘left-behind’ towns, such a move could be a godsend.