The chief executive of Flybe’s parent firm has called for cuts to Air Passenger Duty (APD), warning that regional routes could be abandoned if the carrier collapses.
A report by Sky News said that Mark Anderson (pictured), chief executive of Flybe’s parent company, Connect Airways, has written a letter to the new business secretary, Alok Sharma, ahead of the Budget on March 11.
The report said Anderson outlined Flybe’s “crucial role” in ensuring regional connectivity across the UK.
More: Flybe: Doubts over rescue deal as new chancellor ‘opposes APD cut’
Flybe: Domestic Air Passenger Duty cut sought as part of rescue bid
Flybe: Government on alert as regional carrier ‘faces survival bid’
The letter was said to be prompted by concerns that an overhaul of APD agreed as part of a rescue deal for Flybe could be abandoned under new chancellor Rishi Sunak.
Cutting APD was a key part of a rescue deal agreed with ministers in January when the regional airline came close to appointing administrators after running low on cash.
The new chancellor is said to have opposed the reforms in his previous role as chief secretary to the Treasury.
Flybe believes it is unfairly penalised by the APD system because the tax is levied on both legs of a regional flight.
Sky News said: “Mr Anderson told the business secretary that 88 of its 120 routes are not flown by any other airline.”
The letter said: “If Flybe were to cease trading, only a small number of our routes are likely to be taken up by another carrier, almost certainly at reduced frequencies.
“Over 50% of our customers are business travellers who depend on a regular, convenient schedule.”
Sky News said Flybe proposes a new domestic APD band set at £6.50 – half the current band A rate.
Furthermore, Sky News said separate negotiations between Connect and the government about a £100 million loan on commercial terms appearing to have stalled.