Flybe Deal Keeps Flights Going To Wick For Now
15th January 2020
Flybe's franchise partner Eastern Airways has flights to Wick from Aberdeen and would have been in danger if the company had gone bust.
Flybe has agreed £110m rescue deal. The deal consisted of three parts - a deferment of air passenger duty (APD) and other taxes for Flybe, a government loan and an infusion of cash from the airline's shareholders.
The total value of the deal is worth around £110m, with the tax breaks and government loan accounting for around £80m, with the carrier's investors stumping up the remaining £30m.
Flybe's owners are Connect Airways. Connect Airways leading shareholder is Cyrus Capital, which holds 40 per cent of the company. The remaining shareholders are Sir Richard Branson's Virgin Atlantic and transport firm Stobart, each of which ho ld 30 per cent of Connect. This will be the second time the shareholders have dipped into their pockets to save the airline.
Trudy Morris, chief executive of Caithness Chamber of Commerce, said: "Flights from Wick John O'Groats Airport are very important to businesses in the north Highlands, allowing us to more easily do business with the rest of Scotland and the wider UK, and helping to facilitate inward investment in the region."
The owner of British Airways has filed a complaint with the European Commission over the government bailout of struggling airway Flybe, after its boss branded it a "blatant misuse of public funds"
International Airlines Group (IAG), which also owns Aer Lingus, claims the bailout breaches state aid rules and gives the struggling airline an unfair advantage.
The complaint follows a letter written to Transport Secretary Grant Shapps by Willie Walsh, the CEO of IAG, who asked why the taxpayer was funding the multi-million pound bailout of Flybe, rather than its rich owners.
Mr Walsh is angry because the firm - which was rescued in part by a deferral of an estimated £100m APD tax bill - is owned by, among other shareholders, Virgin Atlantic, which in turn is part-owned by US aviation giant Delta.
"Virgin/Delta now want the taxpayer to pick up the tab for their mismanagement of the airline," Mr Walsh said in his letter.
“This is a blatant misuse of public funds.”
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