Government agrees deal to save airline Flybe
Airline operates 90% of all flights from City Airport
The Government has agreed a rescue deal with flybe's shareholders to keep the company operating, the Business Secretary has said.
Andrea Leadsom said she was "delighted" with the agreement, which came after rescue talks over the weekend.
It comes a day after union GMB warned up to 150 jobs could be lost in Northern Ireland if the airline failed to stave off collapse.
— Andrea Leadsom MP (@andrealeadsom) January 14, 2020
Delighted that we have reached agreement with Flybe’s shareholders to keep the company operating, ensuring that U.K. regions remain connected. This will be welcome news for Flybe’s staff, customers and creditors and we will continue the hard work to ensure a sustainable future.
Flybe operates more UK domestic flights than any other airline and reportedly entered talks over potential emergency financing after suffering rising losses.
It flies to 14 UK destinations from Belfast City, more than any other airline and makes up 90% of all flights from the airport.
A spokesperson for the airline said they were delighted with the support from the Government.
Mark Anderson, CEO of Flybe said: "Flybe is made up of an incredible team of people, serving millions of loyal customers who rely on the vital regional connectivity that we provide.
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"This is a positive outcome for the UK and will allow us to focus on delivering for our customers and planning for the future."
Transport Secretary Grant Shapps also welcomed the agreement.
He said: "Delighted we've been able to work closely with Flybe to ensure Europe's largest regional airline is able to continue connecting communities across Britain. @transportgovuk will undertake an urgent review into how we can level up the country by strengthening regional connectivity."
Among the routes operated by Flybe from Belfast are London, Manchester and Glasgow.
Chancellor Sajid Javid had held talks with the business and transport secretaries to discuss if the loss-making regional carrier can defer paying this year's estimated air passenger duty (APD) bill of £106 million for three years or whether the tax should be cut for all domestic flights, according to multiple reports.
Airlines claim APD restricts connectivity and passenger growth.
And campaigners in Northern Ireland have been calling for the tax to be abolished, after the Irish government did away with the levy.
Jennifer McKeever, the chief executive of bus transport company Airporter, said it was time that the government acted to abolish APD in Northern Ireland.
“Connectivity for NI is absolutely crucial, whether it’s to encourage inward investment, to encourage indigenous business to expand and sell to other markets, or to encourage more visitors to the region, flights into and out of Northern Ireland are key to investment, business growth and tourism.”
East Antrim DUP MP Sammy Wilson said APD was an “unnecessary tax” whicih was “deeply damaging” for outlying parts of the UK.
“If the Government really wants to spread economic growth, even in this digital age, connectivity is of critical importance.
“With much focus of investment on the South East, other regions need reliable and competitive links to London and the rest of the world.
“Also for a Government which emphasises its commitment to the union, it is time they recognised that APD places Northern Ireland airports at a disadvantage to their rivals in the Republic of Ireland.”
He said the difficulties which had faced Flybe were a reflection of the harm caused by APD. “This tax is a punishment on outlying regions and an unfair tax on regular commuters,” Mr Wilson said.
Speaking on Tuesday, DUP MP Sammy Wilson said a renewned debate about scrapping APD was long overdue.
"APD is an unnecessary tax which was introduced for all the wrong reasons and is deeply damaging to connectivity for geographically outlying parts of the United Kingdom. It is high time is was scrapped completely," he said.
"With much focus of investment on the South East, other regions need reliable and competitive links to London and the rest of the world.
"Also for a Government which emphasises its commitment to the Union, it is time they recognised that APD places Northern Ireland airports at a disadvantage to their rivals in the Republic of Ireland.
"Once again with FlyBe we are seeing the impact of this inhibiting tax."