UK government to consider removing domestic air passenger duty to save Flybe

posted on 14th January 2020 by William Hayes
UK government to consider removing domestic air passenger duty to save Flybe

The government is contemplating scrapping air passenger duty on domestic flights to save struggling regional airline Flybe from collapse.

Talks to potentially decide the airline’s future are being held between the chancellor Sajid Javid and various officials from the transport and business departments.

The British government is considering a removal of air passenger duty on domestic flights in a bid to help regional carrier Flybe, the BBC reports.

Chancellor Sajid Javid is holding today emergency talks with officials from the departments of transport and business about the airline’s future.

In a televised interview earlier today, prime minister Boris Johnson said: “We’re working very hard to do what we can, but obviously people will understand that there are limits, commercially, to what a government can do to rescue any particular firm.”

“But what we will do is ensure that we have the regional connectivity that this country needs,” he says.

Such a deal would allow the airline to defer around £100 million ($130 million) in tax payments until 2023 and would be subject to Flybe’s three main shareholders – Virgin Atlantic, Stobart Air and fund management company Cyrus Capital – providing further investment into the airline.

A treasury spokesman refused to comment.

Flybe is the sole operator on multiple domestic routes and plays a key role in ensuring connectivity between several regions of the UK.

Any decision to cut passenger duty would be a step in the opposite direction from action that several countries are taking to curb domestic air travel on environmental grounds.

From April, Germany will levy higher taxes on domestic air flights and reduce taxes on train tickets. Sweden enacted aviation taxes on domestic travel in 2018, while the Dutch government is also set to increase aviation taxes.

Doug Parr, Greenpeace’s UK chief scientist said on Twitter that if the government does reduce air passenger duty, it would leave “little hope for UK decarbonisation efforts”.