Flybe deal: Ryanair and easyJet discuss air passenger duty review

Ryanair and easyJet on Wednesday waded into the debate over whether the Government was right to bail out troubled regional carrier Flybe.

Loss-making Flybe, which had been at risk of collapsing, last night secured a rescue deal with the Government. Westminster is understood to have deferred the airline’s outstanding £106 million air passenger duty bill until the spring, and shareholders will invest more than £20 million into the business it has been reported. As part of the agreement, the Treasury will review taxes on UK flights.

Johan Lundgren, chief executive of easyJet, said that without the details of the deal he couldn’t comment specifically on Flybe. But he added: “We do not support state funding of carriers … taxpayers should not be used to bail out individual companies, especially when they are backed by well-funded businesses."

He welcomed the Government’s plan to review taxes: “The UK’s air passenger duty is one of the highest aviation taxes in the world and adds a significant amount to fares for passengers. It provides no incentives for airlines or passengers to improve the carbon efficiency of their flying, it simply acts as a revenue raiser.”

A spokesman for budget airline Ryanair said: “We have already called for more robust and frequent stress tests on financially weak airlines and tour operators so the taxpayer does not have to bail them out.”

Flybe was taken over by a consortium comprising Stobart Group, Virgin Atlantic and Cyrus Capital Partners last year. The business has been hurt by currency headwinds and softer customer demand.

Mark Anderson, chief executive of Flybe last night said the latest deal is a “positive outcome for the UK and will allow us to focus on delivering for our customers and planning for the future”.

Glyn Jones, chief of Stobart Aviation which is owned by Flybe backer and Southend airport owner Stobart, said: “We welcome confirmation that Flybe will continue to operate as normal. It is a great airline which delivers an excellent service for passengers across the UK. Furthermore, we welcome the Government’s plans to review Air Passenger Duty. Improving regional connectivity is vital for the UK economy.”