The government has confirmed it is committed to reviewing regional connectivity and Air Passenger Duty (APD) following the collapse of Europe’s largest regional carrier Flybe on Thursday (5 March).
Transport secretary Grant Shapps said on Thursday levelling up connectivity across the UK’s regions and nations “was a top priority for this government”. However, he said it was not the role of government to prop up carriers like Flybe, despite the role they play in the UK’s regional transport network.
Shapps said reviews of regional connectivity and APD featured in the government’s “conversations” with Flybe in January when the embattled regional carrier made a plea for state aid or tax relief.
It is understood a £100 million government loan was agreed in principle, with measures to ease the APD burden on carriers like Flybe – which often suffer a “double hit” on APD with outbound and inbound flights on many routes originating from within the UK – set to follow in next week’s budget.
In turn, said Shapps, Flybe “agreed to continue operating”. However, he said despite exploring “multiple options” with Flybe’s shareholders to find a solution, its directors “decided it was not viable to keep Flybe operating”.
“Unfortunately, in a competitive market, companies do fail, but it is not the role of government to prop them up,” said Shapps. “Globally, aviation is facing challenges due to the impact of coronavirus. The government is well prepared for this.
“As the wider economic picture becomes clearer, the chancellor has said that he stands ready to announce further support where needed.
“I have today [Thursday] written to Airport Coordination Limited (ACL), the independent UK slot coordinator, asking them to explicitly take in to account the implications of flying empty planes on the UK’s environmental commitments in reaching decisions on slot alleviation in relation to coronavirus.”
Shapps’ plea to ACL mirrors a missive from Iata calling for regulators around the world not to penalise airlines for suspending flights during the coronavirus crisis by taking slots off them under the so-called “use it or lose it” rule, which means airlines lose slots if they do not operate 80% of scheduled flights under normal circumstances.
On connectivity, Shapps reiterated the government’s plans to work with industry to re-establish key Flybe routes, with Eastern Airways and Loganair already having stepped up to the mark on certain routes, and added he had spoken to airlines and airports to reiterate this.
“We are pleased to see airlines have already committed to operating a number of these routes in the near future,” said Shapps. “I am conscious of the impact on all regions of the UK, particularly Northern Ireland, and the importance of air-based connectivity.
“The aviation minister has spoken to counterparts in the devolved administrations to ensure they are kept informed of the latest developments and are aware of the response plans put in place by my department and the Civil Aviation Authority.
“Levelling up connectivity across our regions and nations is a top priority for this government, which is why we are undertaking a review of regional connectivity to ensure the UK has the domestic transport connections local communities rely on – including regional airports.
“The treasury is also reviewing APD to ensure regional connectivity is supported while meeting the UK’s climate change commitments to meet net zero by 2050.”