The decision to back the airline contradicts previous stances on the likes of Thomas Cook and Monarch . Both of these companies collapsed. Representatives from Flybe were similarly tight-lipped, offering only a bland statement that didn’t go into the specifics of their widely-reported financial problems . “We are pleased with the support received from the Government and the positive outcome for our people, our customers and the UK.
Skift has pressed both Flybe and the government for specifics but both declined to go into further details. British Airways-owner IAG has submitted a complaint to the European Union’s competition authority about what it describes as “the state aid that the UK government has granted to Flybe. ” Join Us at Skift Forum Europe in Madrid on March 24–25 And in a separate statement IAG CEO Willie Walsh tore into the government for effectively propping up an airline backed by some very rich companies. Virgin Atlantic owns 30 percent of Flybe’s parent company Connect Airways, with Stobart Group and investment firm Cyrus Capital holding the rest.
“Prior to the acquisition of Flybe by the consortium, which includes Virgin/Delta, Flybe argued for tax payers to fund its operations by subsidising regional routes. Virgin/Delta now want the taxpayer to pick up the tab for their mismanagement of the airline. This is a blatant misuse of public funds,” Walsh said. “Flybe’s precarious situation makes a mockery of the promises the airline, its shareholders and Heathrow have made about the expansion of regional flights if a third runway is built.
Six months later the airline was begging for help. Much of the reporting around the airline’s struggles has focused on its supposedly onerous tax bill with a suggestion that the UK government could postpone the collection of Air Passenger Duty. Along with plenty of other airlines, Flybe has long complained about the impact of the tax. Almost all passengers on flights leaving UK airports pay a fee, ranging from $17 to $670 for the current financial year.
That sounds like a significant range but in reality Flybe passengers only pay $17 as all short-haul economy flights within Europe, including domestic routes, attract the lowest price point. If it disappeared these airports would struggle. Some of these routes connect up islands with the UK mainland and while there is often an alternative airline available, the routes at least make sense. Flying is less justified between two destinations connect by rail.
Flybe actually switched away from the smaller Gatwick airport, earning it more money . “This is fantastic news for the airport, region and the greater South West of the UK,” Al Titterington, managing director of Cornwall Airport Newquay, said in November 2018 . The train journey between London and Newquay takes just over five hours and those in favor of flying between the two destinations would point to a flight time of just over an hour. But this ignores the travel and expense of getting to Heathrow and also allowing time to check in and board.
The gap between the two is smaller than most people think. This isn’t exactly the same across all domestic and short-haul European routes but as websites such as the Man in Seat 61 show, rail travel is frequently a viable option. There’s also the environmental option to consider. In the December general election he secured a substantial parliamentary majority .
On Monday Johnson said it wasn’t the government’s job to “step in and save companies that simply run into trouble” but a day later that’s effectively what happened. Reports suggest the government has deferred the collection of air passenger duty and is talking about a potential short-term loan. “One of the advantages of leaving the EU is the possibility of cutting or removing APD on domestic travel. It’s an anomaly that particularly hurts regional aviation as it’s levied on both legs of a return journey,” Tim Alderslade, CEO of lobbying group Airlines UK, said.
Flybe effectively stopped being a public company when it sold its operating subsidiaries to the Connect Airways consortium in early 2019 . Remember that passengers pay aviation tax, airlines then collect it before passing it on to the government. of course things might have changed since then but that seems unlikely. The more likely culprit is a loss-making business model.
Eventually, it moved to mostly turbo-prop fleet of but it cost the company millions. The UK government might have provided some much needed short-term help but if the company doesn’t sort itself, we’ll likely be back at the same point in the not-to-distant future.
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