Ministers avert Flybe collapse with vow to review duty

FLYBE’S COLLAPSE has been averted after the Government told the airline it would review air passenger duty (APD).

The Treasury announced last night that the loss-making carrier would continue operating after the review of the tax featured in rescue talks.

Environmental groups warn cutting APD would hamper efforts to combat the climate crisis, while airlines say it restricts connectivity and passenger growth.

Flybe, Europe’s largest regional carrier, confirmed it will “continue to operate as normal” following the deal with its shareholders.

The airline, which serves Leeds Bradford, Doncaster Sheffield and Humberside airports, was bought by a consortium consisting of Virgin Atlantic, Stobart Group and Cyrus Capital in February 2019 after it suffered poor financial results.

The emergency agreement seeks to prevent it becoming the second UK carrier to fail in four months after Thomas Cook went bust in September.

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

“The reviews we are announcing today will help level up our economy. They will ensure that regional connections not only continue but flourish in the years to come – so that every nation and region can fulfil its potential.”

Flybe chief executive Mark Anderson welcomed the deal as a “positive outcome for the UK” which “will allow us to focus on delivering for our customers and planning for the future”.

The Treasury said the review before the March Budget would consider the UK’s climate commitments to be net zero by 2050.

Mr Javid had been holding talks to decide whether to let Flybe defer its estimated £106m APD bill for three years or whether the tax should be cut for all domestic flights, according to multiple reports.