A sigh of relief for Flybe, the regional airline that for many years has linked some thirty British airports with the rest of continental Europe. On Tuesday evening, the Secretary of State for Business Andrea Leadsom confirmed that a rescue agreement of the British carrier, saving it from bankruptcy at the same time. It would have been the second in less than six months in the UK after TUI Airlines.
The agreement reached with the airline's owners - including the Virgin Group - will enable the carrier to survive. The terms of the agreement include a number of measures that will provide Flybe with the liquidity to continue in business with the short-term deferral of part of the taxes levied by the government on Flybe's air passengers - taxes which cost the airline around £106 million a year - as well as a probable loan from the government and a further injection of funds of several tens of millions of pounds from shareholders. The airline currently needs £100 million to stay afloat.
The rescue of the carrier, which employed 2,400 people, is all the more important as Flybe is the largest operator of domestic routes in the UK, accounting for almost two out of every five domestic flights. Several regional airports in the UK depend on the airline, including Belfast, Birmingham, Exeter and Southampton. "We are delighted to have reached an agreement with Flybe's shareholders to keep the company running, ensuring that the UK's regions remain connected.said Andrea Leadsom. This is good news for Flybe's staff, customers and creditors and we will continue to work hard to ensure a sustainable future for Flybe."
This rescue takes place less than a year after the airline escaped from a potential bankruptcy with its takeover by Connect Airways, a consortium made up of Virgin Atlantic, Stobart Air and Cyrus Capital. Operating conditions have deteriorated in recent months, due to the economic uncertainties generated by the Brexit and the weakness of the pound sterling, which are particularly hard on regional routes.
The UK government will commit to a rescue plan in a number of areas, including a study on how to support domestic air transport. Above all, Boris Johnson's government wants to seize the opportunity to abolish the air tax imposed on all routes, including domestic routes. The government could thus reduce, or even abolish this tax on domestic flights. The change could be announced when the budget is voted in March.
Boris Johnson is well aware of the symbolic importance of Flybe. He told the BBC on Tuesday morning: " It's not for the government to step in and save businesses that are simply in trouble, but there's no doubt that we see the importance of Flybe in bringing connectivity across the UK. "
In France, Flybe is a major player on routes to the UK, connecting nearly twenty towns in France with a dozen British cities. From Paris-CDG, for example, Flybe operates routes - often in a monopoly position - to Aberdeen, Birmingham, Cardiff and Edinburgh, ExeterManchester, Newcastle and Southampton. It is also present on routes linking Lyon and Nantes to Birmingham and Manchester, and Rennes to Southampton and Southend, as well as on the French domestic Orly-Rodez route. It also maintains a strong presence in Chambéry and Limoges.
