Environmentalists blast Flybe rescue plan

Environmental campaigners, including MEPs and the former leader of the Green Party Caroline Lucas, have publicly condemned possible moves to reduce air tax to rescue regional carrier Flybe.

They’ve taken the social media to criticise Boris Johnson’s Government after it was suggested that it might allow Flybe to defer its multi-million pound air passenger duty bill to ease its cashflow crisis and prevent its collapse.

Sky News has reported that unless the Government agrees to the move, Flybe could fail as early as today.  

Sky said Flybe’s owners, Virgin Atlantic, Stobart Group and Cyrus Capital, would continue with a turnaround plan that involves pumping a further £100 million into the airline if ministers agree to their proposal to defer its £100 million APD bill.

However, suspending APD for one single airline could fall foul of EU legislation designed to prevent state bailouts of private companies, so instead Chancellor Sajid Javid is considering suspending APD for all domestic flights, not just Flybe’s.

Javid is to meet today with the business and transport departments to discuss lowering the levy and allowing Flybe to defer its tax bill, according to the BBC.

While the Government is keen to avoid setting a precedent in providing financial support to a private company, it is also anxious to avoid the collapse of an airline that provides vital regional links, especially as improving connectivity outside of London was a key manifesto pledge.

Flybe’s collapse would also lead to the loss of around 2,400 jobs just four months after the collapse of Thomas Cook put 9,000 out of work.

The airline has always argued that APD places a disproportionate burden on domestic air passengers because they have to pay £13 for every flight.

But climate change campaigners, including Caroline Lucas, have taken to social media to argue that domestic flights should be reduced, not made cheaper.

In a Tweet, Lucas said: "Addressing #Flybe problems by reducing #APD on all domestic flights is utterly inconsistent ith any serious commitment to tackle #ClimateCrisis".

She claimed that aviation is ‘already subsidised’ as there is no tax on aviation fuel, unlike on petrol. She said domestic flights should be reduced. 

Friends of the Earth CEO Craig Bennett tweeted: "In a #ClimateEmergency, we should be making domestic flights more expensive & trains cheaper"

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A further problem for the Government is that the reducing APD would cut the billions of pounds the tax raises for Government spending. APD is expected to generate £3.7 billion in the current financial year.

Also, if PM Johnson moves to save Flybe, he could be criticised for failing to rescue Thomas Cook, which had asked for a £200 million government loan to prevent its collapse.

Johnson told the BBC: "It’s not for Government to step in and save companies that simply run into trouble.

"But be in no doubt that we see the importance of Flybe in delivering connectivity across the whole United Kingdom.

"It’s very important, for instance, where I was yesterday in Northern Ireland, and we’re working very hard."

Read more:

Why Flybe’s survival matters