Flybe saved in a secret Government deal – for now
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Flybe announced last night that it had agreed a deal with the Government to keep flying. All flights are operating as scheduled and the company should hopefully have enough liquidity now to get through the Winter.
The exact deal has not been revealed. The only public announcement is that the Government will launch a review of the impact of Air Passenger Duty on domestic flights, which adds £26 to every domestic Flybe return ticket.
It is also believed, but not confirmed, that the Government has agreed to defer its demand for over £100m of outstanding APD due from Flybe. There is also talk of the Government potentially making a loan to the airline.
In return, Virgin Atlantic and other shareholders in Connect Airways have agreed to inject a reported £20m of additional funding.
So far so good …. but the airline is clearly going to need to make drastic changes if it is to return to break-even soon.
