A firm of restructuring advisors used by the aviation regulator before the collapse of Thomas Cook has reportedly been drafted in by government as part of rescue efforts for Flybe.
The Department for Transport has hired Alvarez & Marsal (A&M) to provide advise on how much public funding should be lent to the ailing regional carrier and on what terms, according to The Times.
The Civil Aviation Authority spent £660,000 on advice from A&M, which was appointed six months before Thomas Cook failed in September.
The firm is also reported to be involved in a turnaround plan for South African Airways.
The UK government is understood to be using A&M, which specialises in company restructuring, to assess how to draw up a commercial loan for the airline.
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A&M is reported to have been involved in talks between Flybe, its owner, Connect Airways, and Whitehall officials during the past week.
Connect Airways – a consortium of Virgin Atlantic, Stobart Air and hedge fund Cyrus Capital – took over the regional carrier last year, with the members of the group also providing loans to Flybe.
The airline is asking for a £100 million loan from government in exchange for an agreement to invest more capital into Flybe.
Ministers have so far agreed a short-term deferral of less than £10 million in Air Passenger Duty under existing HM Revenue & Customs ‘time to pay’ scheme and to reassess the air tax on all UK domestic airlines.
A separate review of regional connectivity is likely to result in more of Flybe’s domestic routes being re-designated to allow them to benefit from a form of state subsidy.
Flybe said: “We are currently working with our shareholders and the government, all of whom are very supportive of the business, in order to deliver our long-term strategic plan.
“Throughout this process we are continuing to provide great service and connectivity for all customers travelling on our network.”