U.K. Govt agrees deal to save Flybe with owners

The U.K. Government has agreed to a phased payment of Flybe’s tax bill, estimated to be £106 million.

It’s also agreed to reconsider the £26 Airport Departure Tax on domestic flights.

The tax is supported by climate change activists across the political spectrum but it’s often proving to be too much to sustain routes to remote communities, which are also more often the least able to afford it.

Connect, in conjunction with its owners Virgin Atlantic, Stobart, and Cyrus Capital have agreed to invest more money in the airline.

Unsurprisingly this has stirred the ire of British Airways and Willie Walsh who see the predatory collapse of Flybe as simply the death of a bad airline.

Flybe is a unique situation and it’s loss would be a disaster for many because it operates routes nobody else will – Manchester to Edinburg for instance, Newquay to London. It’s also got a strong following in Cardiff which is overlooked by airlines like BA.

BA and the others all stand to gain from a reduction in domestic APD too, so it’s not all bad from their perspective.