Tax break included in Flybe rescue deal

Flybe’s shareholders, which include Virgin Atlantic and Stobart Group, have agreed to put more money into the airline, BBC News reports.

According to Sky News, the deal is likely to involve some deferral of Flybe’s Air Passenger Duty (APD) bill.

There will also be a review, in March’s budget, of the way the tax is applied to domestic flights and further talks about a government loan.

General secretary of pilots union Balpa, Brian Strutton, said the government “should be applauded” for “stepping up to the plate to help one of the few remaining independent UK airlines and a vital one at that”.

“This is good news for the 2,400 Flybe staff whose jobs are secured and regional communities who would have lost their air connectivity without Flybe,” he added.

“Balpa looks forward to discussing the airline’s future plans in detail with management, meanwhile passengers can be confident that Flybe remains an excellent choice for regional flying.”

Upon agreeing the deal, business secretary Andrea Leadsom tweeted: “Delighted that we have reached agreement with Flybe’s shareholders to keep the company operating, ensuring that UK 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.”

APD is currently set at £13 and upwards for a single journey, depending on the length of flight and cabin premiums.

Should the government defer or scrap Flybe’s reported £106 million APD bill, to avoid breaking EU state aid rules it would need to be implemented across all domestic carriers, not just for Flybe.