Boris Johnson says UK government 'working hard' to save Branson-owned airline

  • Three cabinet ministers are reportedly holding crunch talks on Tuesday about the fate of Flybe.
  • U.K. leader Boris Johnson told the BBC that the regional airline is crucial to U.K. connectivity.
  • Reports circulate that a U.K.-specific air passenger tax could be deferred to help save the airline.

U.K. Prime Minister Boris Johnson has offered a heavy hint that his new Conservative administration will begrudgingly step in to help prevent the collapse of Europe's biggest regional airline, Flybe.

Last year, Richard Branson's Virgin Atlantic, Stobart Air and Cyrus Capital jointly bought the airline for just $2.8 million. They promised to invest £100 million ($130 million) in the struggling firm which was set to be rebranded as Virgin Connect.

Reports have been circulating since Sunday that the airline is on the brink of collapse.

Speaking to the BBC Tuesday, Johnson said it was "not for a government to step in and save companies that simply run into trouble," but then added that the government "recognized the importance of Flybe" and was working hard to do what it could.

Sky news reported Tuesday that the three U.K. cabinet ministers responsible for finance, transport and business will hold an emergency meeting to discuss a rescue package.

One plan on the table is to let Flybe delay payment of this year's estimated air passenger duty (APD) bill of £106 million for three years. The government would allow the tax deferral only if Flybe's consortium of owners committed their own funds.

Flybe is the biggest operator of U.K. domestic flights and serves routes to 30 different airports in continental Europe. According to its own figures, Flybe carries 8 million passengers a year on 74 aircraft, making it Europe's largest fleet devoted to regional connections.

Its network serves more than half of all U.K. domestic flights that do not depart from or land in London. It's seen as strategically crucial to regions and islands around Britain that aren't served by rail.

In September 2019, U.K. operator Thomas Cook went into administration, which stranded thousands of passengers all over the world. Two years prior, Monarch Airlines collapsed. The U.K. government of the time refused to step in on both occasions.

Flybe itself has so far refused to comment on the need for a bailout beyond a statement that said it continued to operate as normal. It refrained from commenting on any speculation.

Travelers on U.K. domestic flights pay £13 in APD for a single flight. It was introduced with a stated impact of reducing the environmental impact of flying. Greenpeace U.K. Chief Scientist Doug Parr said on Twitter Tuesday that "cutting air passenger duty encourages flying" and should not be used to save a struggling airline.

Source: Read Full Article