Leading economist calls government wrong for bailing out Flybe

posted on 16th January 2020 by William Hayes
Leading economist calls government wrong for bailing out Flybe

The government’s bailout of struggling regional carrier Flybe contradicts promises made in its manifesto and is a move in the wrong direction, according to the Institute for Public Policy Research (IPPR) chief economist Carys Roberts.

The London think tank academic said that the rescue package “flies in the face” of the government’s pledge to make the UK the “cleanest, greenest” country on earth.

She pointed out that domestic flights contribute more to pollution than any other form of travel – producing more than three times as many emissions as rail, and 22 times the emissions of the Eurostar.

“Any cut to air passenger duty would boost demand for these polluting flights,” said Roberts.

She also questioned why the company should get a special bailout, considering that domestic air travel already benefits from no taxes on fuel, and the zero-rating of tickets for VAT.

“Other countries are moving in the opposite direction,” she said, pointing out that “France is even considering banning all domestic flights where a train journey could be made in under five hours.”

“Connecting the regions of the UK is vital for economic growth that is fairly shared. But to do this the government should be investing in rail rather than propping up uncompetitive, carbon-intensive businesses,” added Roberts.

Rob Burgess, editor of the UK’s biggest frequent flyer website headforpoints.com, disagreed, saying: “If the airline goes, the airports go” – referring to small regional airports such as Exeter Airport or Southampton, where Flybe represents over 75 per cent of traffic.

“Easyjet, Ryanair and Jet2 have no interest in operating 78-seat Dash-8 aircraft. Eastern and Loganair are too small and financially weak to pick up the slack,” said Burgess