Thursday, 16 January 2020

UK Government provides a transport update on Flybe


The Department for Transport, the Treasury and the Department for Business, Energy, and Industrial Strategy have been in discussions with Europe’s largest regional airline, Flybe, which plays an important role in the UK’s connectivity by flying regional routes.

In a sign of the Prime Minister’s commitment to levelling up all regions of the UK, the government has announced additional measures to support regional connectivity across the UK, to ensure all corners of the country drive the economy, and fully benefit from prosperity in years to come.

A review of regional connectivity will ensure all nations and regions of the UK have the domestic transport connections local communities rely on – including regional services from local airports. This review, led by DfT, will consider all options to ensure we continue to have good regional connectivity. The DfT will work closely with the aviation industry, local regions and devolved nations to identify how we can support connectivity.


As part of this work and ahead of the March Budget, the Treasury will also be reviewing Air Passenger Duty (APD) to ensure regional connectivity is supported while meeting the UK’s climate change commitments to meet net zero by 2050.

The outcomes of these reviews will benefit the entire industry, passengers, communities, regions and nations across the UK.

These measures featured in discussions between the Department for Transport, the Department for Business, Energy and Industrial Strategy and HM Treasury and Europe’s largest regional airline, Flybe, which plays an important role in the UK’s connectivity.

HMG was notified about the difficulties of Flybe on 11 January, and since then we have worked intensively with the company to understand their financial position and explore options. In the light of these discussions the management and shareholders on 14 January took action to set Flybe on a recovery path.




Government announces measures on regional connectivity

The Government has today announced additional measures to support and enhance regional connectivity across the UK, to ensure all corners of the country drive the economy, and fully benefit from prosperity in years to come.


In a sign of the Prime Minister’s commitment to levelling up all regions of the UK, a review of regional connectivity will ensure all nations and regions of the UK have the domestic transport connections local communities rely on – including regional airports.

As part this work and ahead of the March Budget, the Treasury will also be reviewing Air Passenger Duty to ensure regional connectivity is strengthened while meeting the UK’s climate change commitments to meet net zero by 2050.

These measures featured in discussions today with Europe’s largest regional airline, Flybe, which plays an important role in the UK’s connectivity by flying regional routes that other providers do not operate.

In light of these discussions, Flybe has confirmed they will continue to operate as normal, preserving flights to airports such as Southampton, Belfast and Birmingham.

Chancellor of the Exchequer Sajid Javid said: "I welcome Flybe’s confirmation that they will continue to operate as normal, safeguarding jobs in UK and ensuring flights continue to serve communities across the whole of the UK.

The reviews we are announcing today will help level up our economy. They will ensure that regional connections not only continue but flourish in the years to come – so that every nation and region can fulfil its potential."

Business Secretary Andrea Leadsom said: "I am delighted that we have managed to reach an agreement with Flybe shareholders to keep the company in operation, ensuring that regions across the country can continue to be connected.

My department and others across government have worked tirelessly in an incredibly short timeframe. This will be welcome news for Flybe, their customers and dedicated employees, as well as those in the supply chain. We will continue to work with Flybe and regional operators to find a sustainable long term future."

Transport Secretary Grant Shapps said: "I am delighted that we have been able to work closely with Flybe to ensure Europe’s largest regional airline is able to continue providing their valued services, connecting communities across the UK.

The Department for Transport will undertake an urgent review into how we can level up the country by strengthening regional connectivity and will look at all the options that we have to make sure our airports can continue to play an important role in driving economic growth, creating jobs and greening aviation, across the country."

Mark Anderson, CEO of Flybe said: "Flybe is made up of an incredible team of people, serving millions of loyal customers who rely on the vital regional connectivity that we provide. This is a positive outcome for the UK and will allow us to focus on delivering for our customers and planning for the future."

Lucien Farrell, Chairman Connect Airways said: "We are very encouraged with recent developments, especially the Government’s recognition of the importance of Flybe to communities and businesses across the UK and the desire to strengthen regional connectivity. As a result, the shareholder consortium has committed to keep Flybe flying with additional funding alongside Government initiatives."

Additional information
At Budget 2018, the government announced that for the eighth year in a row short-haul rates will not rise, staying at £13 for economy and £26 for business/first, keeping down the costs of travelling for 80% of passengers.

UK passenger growth is strong: passenger numbers at UK airports have increased by 28% since 2013. This strength extends across the whole of the UK, with regional airports handling approximately 39% of all passengers in 2018.

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