Airline keeps flying
Virgin and Stobart back government Flybe deal
Rescued: the deal is described as good news for staff
Cash-strapped regional airline Flybe has secured a rescue deal with its investors and the government that will ensure it continues flying.
It shareholders, which include Virgin Atlantic and Stobart Group, have agreed to put more money into the business while the government will defer a tax bill.
It has agreed to review air passenger duty with the prospect of an eventual cut. To appease environmentalist there is likely to be some form of offset.
However, the bailout has been branded a “misuse of public funds” by Willie Walsh, the chief executive of the owner of British Airways, who attacked the government’s plan in a letter to Transport Secretary Grant Shapps.
“Virgin/Delta now want the taxpayer to pick up the tab for their mismanagement of the airline,” Mr Walsh said in his letter. “This is a blatant misuse of public funds.”
“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.”
Business Secretary Andrea Leadsom said the deal would keep the Devon-based company operating.
“Delighted that we have reached agreement with Flybe’s shareholders to keep the company operating, ensuring that UK regions remain connected,” she said in a tweet.
The deal retains important connections and the jobs of 2,400 staff.