[SimonS1]

I find the whole FlyBe thing quite hard to understand.

According to The Times the airline has collected £106m of accumulated APD, due to the taxpayer as an environmental tax which they now want to defer paying for 3 years.

Also that the Government is to undertake a review with a view to reducing/removing the £13 APD on domestic flights. This would need to be done across all airlines to avoid infringing state aid regulations.

So what is the likely outcome.

1. FlyBe keeps fares as they are, APD is removed, so they make an extra £13 profit per passenger. More profits for the airline, less income for the treasury. Or will fares go down with the hope of attracting more travellers (in which case profit per existing passengers will be unchanged).

2. Other more efficiently run airlines take the opportunity to reduce their fares by £13? Perhaps it will encourage the likes of Easyjet to open up more routes, which will thrill the environmental lobby.

3. If APD is removed, what about APD that has already been collected for future flights? Or will airlines like BA be allowed to just pocket the cash as a windfall?

4. The airline has private sector owners (Stobart, Virgin etc) – why don’t they stump up? Or is the government now the backer of last resort for failing businesses? Although undeniably if FlyBe is just left to fail the consequences for places line Southampton and Jersey would be significant.

When added to the crisis on the railways (The Times reports 6 operators in distress, with Northern and SWT at imminent risk of failure) it really does look like domestic public transport needs a complete rethink.

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FaroFlyer

[FaroFlyer]

Agree with you SimonS1. Why is Flybe different to Monarch or Thomas Cook?

Also, how have Flybe been allowed to collect £106 million APD and not hand it over? No business would be allowed to delay VAT for 3 years.

TominScotland says “Flybe are certainly not cheap compared to other carriers” If Flybe have competition on domestic routes surely they will just bump up prices, and step in to take up demand.

Yes, the consequences for places line Southampton and Jersey would be significant, but if the full cost of service was being paid then one assumes Flybe would not still be in a financial mess.

[FaroFlyer]

SimonS1, it seems that APD deferral is 3 months, not 3 years.

[canucklad]

A couple of points to add to the points already made……

[quote quote=986896]Agree with you SimonS1. Why is Flybe different to Monarch or Thomas Cook?[/quote]

Although it’s a personal tragedy or misfortune (dependant on your outlook) for the people who lost their jobs at Monarch or Thomas Cook, the knock on effect to the communities that FlyBe serve are far more consequential than holiday makers losing choice.
And actually, the most damning aspect of all this, is the need for these primarily mainland communities to be reliant on a business that buzzes about the air in turboprop aircraft , all because our rail network is so overpriced and frankly Shite!!

[quote quote=986896]TominScotland says “Flybe are certainly not cheap compared to other carriers” If Flybe have competition on domestic routes surely they will just bump up prices, and step in to take up demand.[/quote]

See above — invariably , Flybe were always cheaper than and much quicker than using the train. Plus, on the EDI-LHR route in most cases they are cheaper than the monopolistic thinking BA!

One further point, Willie Walsh opens his mouth about the deal, and all you hear out of him is hypocrisy.
He’d have had my ear, if his airline wasn’t so London centric locked into its LHR fortress –What a Clown !

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cwoodward, tomwjsimpson

[Johnnyg]

Trying to rack my brains re BA, have they ever received aid or government help in recent times?

It must also be a worry to Southampton airport etc who would not only lose approx 90% of flights but also for the ground handlers and other staff located there.

[SimonS1]

[postquote quote=986904][/postquote]

Its reported in the media as 3 years, but who knows.

https://www.cnbc.com/amp/2020/01/14/pm-johnson-says-uk-working-to-save-branson-owned-airline-flybe.html

[AMcWhirter]

[quote quote=986972]It must also be a worry to Southampton airport etc who would not only lose approx 90% of flights but also for the ground handlers and other staff located there.[/quote]

Not only Southampton. Other affected airports are Exeter and Belfast City. Cardiff and Newquay also affected but not to the same degree.

Whilst Edinburgh will surely regain other carriers/routes (were Flybe to fail).

Back in October 2018 we reported that Flybe was the second largest user at Edinburgh and was handling almost 650,000 pax over 13 routes.

Edinburgh criticised for favouring international airlines

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SimonS1

[openfly]

The APD collected from passengers fares is payable to HMRC once every 6 months. If Flybe is allowed a long breathing space before handing this over, then it follows that this is unfair to all the other airlines who are holding the tax. I can understand why IAG, Easyjet, Ryanair and others are complaining of the fairness of this deal….can of worms!

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AFlyingDutchman

[capetonianm]

Flybe’s rescue deal could include subsidies for some of its routes as backlash mounts

The Government is considering subsidising some routes operated by Flybe as part of its rescue deal as the backlash over the agreement escalates.

Any decision to grant the regional airline so-called public service obligation status on some of its routes, which acts as an effective subsidy, would come on top of a deferral of air passenger duty (APD) payments and a proposed government loan, Bloomberg reported on Friday.

https://www.telegraph.co.uk/business/2020/01/17/flybe-hits-inaccurate-reporting-war-words-escalates/

[AMcWhirter]

Last week all the talk about how vital Flybe was to our regional connectivity.

This morning I read that Flybe is looking to start a new LHR-DUS route (presumably as a means of feeding Virgin Atlantic).

[Paywall]

telegraph.co.uk/business/2020/01/19/bailed-flybe-mount-attack-lucrative-heathrow-to-dusseldorf-route/

[Swissdiver]

There is a mechanism in place when there is a public need: PSO. Now it comes at a risk since an auction must be organised. But at least it clarifies the game. Routes to Jersey or IOM could be operated under such a licence. And it would differentiate them from LHR-DUS that is certainly not driven by the same aim…

[AMcWhirter]

Flybe seeks £100 million govt loan.

https://www.bbc.co.uk/news/business-51244308

[SimonS1]

So the owners have put in £20m. And they want the taxpayer to lend £100m, plus £30m already promised, plus deferral of taxes.

Sounds a bit rich to me. The other way around and it might be half sensible.

[tomwjsimpson]

Thankfully, flights I had booked from ABZ have had a schedule change. I’ve rejected this, opted for a refund and will fly with Loganair instead.

It may almost be February but March seems a long time away for flybe!

[capetonianm]

How is this not against EU rules, although I suppose after next Friday they will no longer apply?

[Author]

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