The government has reached agreement with Flybe on a deal to rescue the regional carrier.
Business secretary Andrea Leadsom tweeted on Tuesday evening to say: “Delighted that we have reached agreement with Flybe’s shareholders to keep the company operating, ensuring that UK regions remain connected.
“This will be welcome news for Flybe’s staff, customers and creditors and we will continue the hard work to ensure a sustainable future.”
Shareholders have agreed to put more money into the airline, Europe’s largest regional carrier with a fleet of 75 aircraft.
Flybe has been owned by a consortium including Virgin Atlantic, Stobart Group and Cyrus Capital since March last year.
Details of the rescue plan are yet to be released but are understood to avoid a breach of EU state aid rules.
In a statement, Flybe said: “We’re delighted with the support received from the government and the positive outcome for our people, our customers and the UK.
“Flybe remains committed to providing exceptional air connectivity for the UK regions with the full support of its shareholders.
Flybe chief executive Mark Anderson 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.”
Delighted that we have reached agreement with Flybe’s shareholders to keep the company operating, ensuring that U.K. regions remain connected. This will be welcome news for Flybe’s staff, customers and creditors and we will continue the hard work to ensure a sustainable future.
— Andrea Leadsom MP (@andrealeadsom) January 14, 2020
Sky News reported on Sunday night that the regional airline, which handles more than half of UK domestic flights outside London, has been trying to secure additional financing amid mounting losses.
Reports had suggested that a cut in Air Passenger Duty had been sought as part of a proposed rescue deal. A possible deal over APD was touted to see Flybe defer a payment of more than £100 million for three years.
Flybe, Virgin Atlantic, Stobart Group and EY, which was reportedly poised to act as administrators, all declined to comment ahead of the deal being announced.
Brian Strutton, general secretary of union Balpa, said: “This is good news for 2,400 Flybe staff whose jobs are secured and regional communities who would have lost their air connectivity without Flybe.
“Balpa looks forward to discussing the airline’s future plans in detail with management, meanwhile passengers can be confident that Flybe remains an excellent choice for regional flying.
“The government is to be applauded for stepping up to the plate to help one of the few remaining independent UK airlines and a vital one at that.”