Brexit presents chance to cut claims ‘burden’, says Christine Ourmières-Widener. Ian Taylor reports
Flybe chief executive Christine Ourmières-Widener called last week for the scrapping of Air Passenger Duty and changes to flight-delay compensation rules when Britain leaves the EU.
She insisted: “It is imperative APD is reduced, if not scrapped, to end the lack of fairness for passengers flying within the UK and allow airlines to offer more connections to the regions.”
APD applies on all UK departures, so passengers on domestic flights pay twice.
Speaking at a Westminster Energy, Environment and Transport Forum on aviation, Ourmières-Widener said: “APD distorts the marketplace.
“Domestic passengers pay APD twice while passengers flying abroad pay only once. The £26 on a return domestic flight is equivalent to 15% of our average fare. The effect is even more apparent on lead-in fares, when it can be 50% of the price.
“Scrapping APD would be an incentive to improve connectivity. Regional aviation can be supported by reducing the burden.”
Ourmières-Widener also called for a revision of EU regulation 261 on compensation for flight delays and cancellations. “Passenger compensation is a disadvantage to domestic routes – paying €250 compensation on a flight that cost £50 is clearly strange,” she said.
But she pointed out: “Brexit places the UK in a unique position. It offers an opportunity to address this disparity. The UK should establish less-stringent regulations for domestic flights.”
Flybe was recently saved from bankruptcy by its takeover by the Connect Airways consortium of Virgin Atlantic, Southend airport-owner Stobart Group and US hedge fund Cyrus Capital.
Virgin Atlantic chief executive Shai Weiss has since explained he regards Heathrow expansion as key to the Flybe deal, with the government keen on improved connectivity between Heathrow and the regions.
Ourmières-Widener noted “large parts of Britain are without access to the UK’s largest airport” and said: “We support a third runway at Heathrow.”
It is proposed that a proportion of new slots made available by a third runway be allocated to domestic routes.
But Ourmières-Widener expressed “doubt about the business case for a lot of new domestic services” and said the current system of slot allocation means “existing domestic routes risk being frozen out”.
Services may need to be subsidised, she said, arguing: “Slots could be supported by passenger service obligations [PSOs].”
EU rules allow the subsidy of transport routes that aren’t commercially viable under PSO arrangements. Flybe already operates some routes on this basis, including its recently launched Newquay-Heathrow flights.
The carrier has yet to change hands following its recent acquisition, pending regulatory clearance.
Ourmières-Widener added: “We have new owners, but we are still awaiting clearance – we hope in June or July.”
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